ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2019 |
Commission File Number: 1-34694 VEON LTD. |
(Exact name of Registrant as specified in its charter) |
Bermuda |
(Jurisdiction of incorporation or organization) |
Claude Debussylaan 88, 1082 MD, Amsterdam, the Netherlands |
(Address of principal executive offices) |
Scott Dresser Group General Counsel Claude Debussylaan 88, 1082 MD, Amsterdam, the Netherlands Tel: +31 20 797 7200 |
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
American Depositary Shares, or ADSs, each representing one common share | VEON | NASDAQ Global Select Market |
Common shares, US$0.001 nominal value | NASDAQ Global Select Market* |
* | Listed, not for trading or quotation purposes, but only in connection with the registration of ADSs pursuant to the requirements of the Securities and Exchange Commission. |
Large accelerated filer ý | Accelerated filer o | Non-accelerated filer o | Emerging growth company o |
U.S. GAAP o | International Financial Reporting Standards as issued by the International Accounting Standards Board ý | Other o |
• | our ability to implement and execute our strategic priorities successfully and to achieve the expected benefits from, our existing and future transactions; |
• | our targets and strategic initiatives in the various countries in which we operate; |
• | our ability to develop new revenue streams and achieve portfolio and asset optimizations, improve customer experience and optimize our capital structure; |
• | our ability to generate sufficient cash flow to meet our debt service obligations, our expectations regarding working capital and the repayment of our debt and our projected capital requirements; |
• | our plans regarding our dividend payments and policies, as well as our ability to receive dividends, distributions, loans, transfers or other payments or guarantees from our subsidiaries; |
• | our expectations regarding our capital and operational expenditures in and after 2020; |
• | our goals regarding value, experience and service for our customers, as well as our ability to retain and attract customers and to maintain and expand our market share positions; |
• | our plans to develop, provide and expand our products and services, including operational and network development, optimization and investment, such as expectations regarding the expansion or roll-out and benefits of 3G, 4G/LTE and 5G networks or other networks, broadband services and integrated products and services, such as fixed-mobile convergence; |
• | our expectations as to pricing for our products and services in the future, improving our ARPU and our future costs and operating results; |
• | our ability to meet license requirements, to obtain, maintain, renew or extend licenses, frequency allocations and frequency channels and to obtain related regulatory approvals; |
• | our plans regarding marketing and distribution of our products and services, including customer loyalty programs; |
• | our expectations regarding our competitive strengths, customer demands, market trends and future developments in the industry and markets in which we operate; |
• | our expectations regarding management changes; and |
• | other statements regarding matters that are not historical facts. |
• | risks relating to changes in political, economic and social conditions in each of the countries in which we operate and where laws are applicable to us (including as a result of armed conflict) such as any harm, reputational or otherwise, that may arise due to changing social norms, our business involvement in a particular jurisdiction or an otherwise unforeseen development in science or technology; |
• | in each of the countries in which we operate and where laws are applicable to us, risks relating to legislation, regulation, taxation and currency, including costs of compliance, currency and exchange controls, currency fluctuations, and abrupt changes to laws, regulations, decrees and decisions governing the telecommunications industry and the taxation thereof, laws on foreign investment, anti-corruption and anti-terror laws, economic sanctions and their official interpretation by governmental and other regulatory bodies and courts; |
• | risks related to the impact of export controls on our and important third-party suppliers’ ability to procure goods, software or technology necessary for the services we provide to our customers, particularly on the production and delivery of supplies, support services, software, and equipment that we source from these suppliers — for example, in April 2018, the U.S. Department of Commerce, Bureau of Industry and Security (“BIS”) issued an Export Administration Regulation (“EAR”) Denial Order to ZTE Corporation (“ZTE”) which prohibited, among other things, exports, re-exports and in-country transfers of goods, software and technology (collectively, “Items”), each of which could have led to service degradation and disruptions in certain markets, and in May and August 2019, BIS added Huawei Technologies Company Ltd. and 114 of its affiliates (collectively, “Huawei”) to its “Entity List”, prohibiting companies globally from directly or indirectly exporting, re-exporting or in-country transferring all Items subject to the EAR to Huawei and procuring Items from Huawei when they have reason to know that the Items were originally procured by Huawei in violation of U.S. law; |
• | risks relating to a failure to meet expectations regarding various strategic initiatives, including, but not limited to, changes to our portfolio; |
• | risks related to solvency and other cash flow issues, including our ability to raise the necessary additional capital and incur additional indebtedness, the ability of our subsidiaries to make dividend payments, our ability to develop additional sources of revenue and unforeseen disruptions in our revenue streams; |
• | risks that the adjudications by the various regulatory agencies or other parties with whom we are involved in legal challenges, tax disputes or appeals may not result in a final resolution in our favor or that we are unsuccessful in our defense of material litigation claims or are unable to settle such claims; |
• | risks relating to our company and its operations in each of the countries in which we operate and where laws are applicable to us, including demand for and market acceptance of our products and services, regulatory uncertainty regarding our licenses, frequency allocations and numbering capacity, constraints on our spectrum capacity, availability of line capacity, intellectual property rights protection, labor issues, interconnection agreements, equipment failures and competitive product and pricing pressures; |
• | risks related to developments from competition, unforeseen or otherwise, in each of the countries in which we operate and where laws are applicable to us, including our ability to keep pace with technological change and evolving industry standards; |
• | risks related to the activities of our strategic shareholders, lenders, employees, joint venture partners, representatives, agents, suppliers, customers and other third parties; |
• | risks associated with our existing and future transactions, including with respect to realizing the expected synergies of closed transactions, satisfying closing conditions for new transactions, obtaining regulatory approvals and implementing remedies; |
• | risks associated with data protection, cyber-attacks or systems and network disruptions, or the perception of such attacks or failures in each of the countries in which we operate, including the costs associated with such events and the reputational harm that could arise therefrom; |
• | risks related to the ownership of our American Depositary Receipts, including those associated with VEON Ltd.’s status as a Bermuda company and a foreign private issuer; and |
• | other risks and uncertainties as set forth in Item 3D. Risk Factors. |
Year ended December 31, | |||||||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||
Service revenues | 8,240 | 8,526 | 9,105 | 8,553 | 9,313 | ||||||||||
Sale of equipment and accessories | 465 | 427 | 244 | 184 | 190 | ||||||||||
Other revenues / other income | 158 | 133 | 125 | 148 | 103 | ||||||||||
Total operating revenues | 8,863 | 9,086 | 9,474 | 8,885 | 9,606 | ||||||||||
Service costs | (1,554 | ) | (1,701 | ) | (1,879 | ) | (1,769 | ) | (1,937 | ) | |||||
Cost of equipment and accessories | (479 | ) | (415 | ) | (260 | ) | (216 | ) | (231 | ) | |||||
Selling, general and administrative expenses | (2,965 | ) | (3,697 | ) | (3,748 | ) | (3,668 | ) | (4,563 | ) | |||||
Other operating gain / (loss) | 350 | — | — | — | — | ||||||||||
Depreciation | (1,652 | ) | (1,339 | ) | (1,491 | ) | (1,439 | ) | (1,550 | ) | |||||
Amortization | (394 | ) | (495 | ) | (537 | ) | (497 | ) | (517 | ) | |||||
Impairment (loss) / reversal | (108 | ) | (858 | ) | (66 | ) | (192 | ) | (245 | ) | |||||
Gain / (loss) on disposal of non-current assets | (43 | ) | (57 | ) | (26 | ) | (20 | ) | (39 | ) | |||||
Gain / (loss) on disposal of subsidiaries | 1 | 30 | — | — | — | ||||||||||
Operating profit | 2,019 | 554 | 1,467 | 1,084 | 524 | ||||||||||
Finance costs | (892 | ) | (816 | ) | (935 | ) | (830 | ) | (829 | ) | |||||
Finance income | 53 | 67 | 95 | 69 | 52 | ||||||||||
Other non-operating gain / (loss) | 21 | (68 | ) | (97 | ) | (82 | ) | (42 | ) | ||||||
Share of profit / (loss) of joint ventures and associates | — | — | (22 | ) | (11 | ) | 14 | ||||||||
Impairment of joint ventures and associates | — | — | (110 | ) | (99 | ) | — | ||||||||
Net foreign exchange gain / (loss) | (20 | ) | 15 | (70 | ) | 157 | (314 | ) | |||||||
Profit / (loss) before tax | 1,181 | (248 | ) | 328 | 288 | (595 | ) | ||||||||
Income tax expense | (498 | ) | (369 | ) | (472 | ) | (635 | ) | (220 | ) | |||||
Profit / (loss) from continuing operations | 683 | (617 | ) | (144 | ) | (347 | ) | (815 | ) | ||||||
Profit / (loss) after tax from discontinued operations | — | (300 | ) | (390 | ) | 979 | 262 | ||||||||
Gain / (loss) on disposal of discontinued operations | — | 1,279 | — | 1,788 | — | ||||||||||
Profit / (loss) for the period | 683 | 362 | (534 | ) | 2,420 | (553 | ) | ||||||||
Attributable to: | |||||||||||||||
The owners of the parent (continuing operations) | 621 | (397 | ) | (115 | ) | (439 | ) | (917 | ) | ||||||
The owners of the parent (discontinued operations) | — | 979 | (390 | ) | 2,767 | 262 | |||||||||
Non-controlling interest | 62 | (220 | ) | (29 | ) | 92 | 102 | ||||||||
683 | 362 | (534 | ) | 2,420 | (553 | ) | |||||||||
Basic and diluted gain / (loss) per share attributable to ordinary equity holders of the parent: | |||||||||||||||
From continuing operations | $ | 0.36 | $ | (0.23 | ) | $ | (0.07 | ) | $ | (0.25 | ) | $ | (0.52 | ) | |
From discontinued operations | $ | — | $ | 0.56 | $ | (0.22 | ) | $ | 1.58 | $ | (0.52 | ) | |||
Total | $ | 0.36 | $ | 0.33 | $ | (0.29 | ) | $ | 0.23 | $ | 0.035 |
As of December 31, | ||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||
(in millions of U.S. dollars) | ||||||||||
Consolidated balance sheet data: | ||||||||||
Cash and cash equivalents | 1,250 | 1,808 | 1,314 | 2,942 | 3,614 | |||||
Working capital (deficit)(1) | (3,269 | ) | (1,316 | ) | (716 | ) | (2,007 | ) | (156 | ) |
Property and equipment, net | 7,340 | 4,932 | 6,237 | 6,719 | 6,239 | |||||
Intangible assets and goodwill | 5,688 | 5,670 | 6,786 | 6,953 | 6,447 | |||||
Total assets | 16,059 | 14,102 | 19,484 | 21,193 | 33,854 | |||||
Total liabilities | 13,839 | 11,323 | 15,594 | 15,150 | 29,960 | |||||
Total equity | 2,220 | 2,779 | 3,890 | 6,043 | 3,894 |
(1) | Working capital (deficit) is calculated as current assets less current liabilities and is equivalent to net current assets. |
As of and for the year ended December 31, | ||||||||||
2019 | 2018 | 2017 | 2016 | 2015 | ||||||
Mobile customers in millions | ||||||||||
Russia | 54.6 | 55.3 | 58.2 | 58.3 | 59.8 | |||||
Pakistan | 60.5 | 56.2 | 53.6 | 51.6 | 36.2 | |||||
Algeria | 14.6 | 15.8 | 15 | 16.3 | 17 | |||||
Bangladesh | 33.6 | 32.3 | 31.3 | 30.4 | 32.3 | |||||
Ukraine | 26.2 | 26.4 | 26.5 | 26.1 | 25.4 | |||||
Uzbekistan | 8.1 | 9.1 | 9.7 | 9.5 | 9.9 | |||||
Kazakhstan | 10.2 | 9.9 | 9.8 | 9 | 9.5 | |||||
Mobile data customers in millions | ||||||||||
Russia | 35.5 | 36.8 | 38.4 | 36.6 | 34.3 | |||||
Pakistan | 38.8 | 33 | 28.5 | 25.1 | 16.8 | |||||
Algeria | 8.8 | 9.2 | 7.2 | 7 | 4.1 | |||||
Bangladesh | 21.5 | 19.6 | 16.9 | 14.9 | 14 | |||||
Ukraine | 16.9 | 14.8 | 12.5 | 11.2 | 12 | |||||
Uzbekistan | 5.2 | 5.5 | 5 | 4.6 | 4.7 | |||||
Kazakhstan | 6.9 | 6.3 | 5.7 | 4.9 | 5 | |||||
Mobile ARPU (in U.S. dollars) | ||||||||||
Russia | 5.3 | 5.4 | 5.5 | 4.6 | 5.1 | |||||
Pakistan | 1.7 | 2.1 | 2.2 | 2.3 | 2.1 | |||||
Algeria | 4.2 | 4.3 | 4.8 | 5.1 | 6 | |||||
Bangladesh | 1.3 | 1.3 | 1.5 | 1.6 | 1.6 | |||||
Ukraine | 2.6 | 2 | 1.8 | 1.7 | 1.8 | |||||
Uzbekistan | 2.4 | 2.8 | 4.4 | 5.6 | 5.7 | |||||
Kazakhstan | 3.1 | 3 | 3 | 2.7 | 4.4 |
• | we cannot assure you that our revenue will grow in the future, as competition puts pressure on prices; |
• | with the increasing pace of technological developments, including new digital technologies and regulatory changes impacting our industry, we cannot predict with certainty future business drivers and we cannot assure you that we will adapt to these changes at a competitive pace; |
• | we may be forced to utilize more aggressive marketing schemes to retain existing customers and attract new ones that may include lower tariffs, handset subsidies or increased dealer commissions; |
• | in more mature or saturated markets, such as Russia, there are limits on the extent to which we can continue to grow our customer base, and the continued growth of our business and results of operations will depend, in part, on our ability to extract greater revenue from our existing customers, including through the expansion of data services and the introduction of next generation technologies, which may prove difficult to accomplish; |
• | we may be unable to deliver better customer experience relative to our competitors or our competitors may reach customers more effectively through better use of digital and physical distribution channels, which may negatively impact our revenue and market share; |
• | as we expand the scope of our services, such as new networks, fixed-line residential and commercial broadband, Mobile Financial Services ("MFS") and Digital Financial Services ("DFS") offerings and other services, we may encounter a greater number of competitors that provide similar services; |
• | the liberalization of the regulations in certain markets in which we operate could greatly increase competition; |
• | competitors may operate more cost-effectively or have other competitive advantages such as greater financial resources, market presence and network coverage, stronger brand name recognition, higher customer loyalty and goodwill, and more control over domestic transmission lines; |
• | competitors, particularly current and former state-controlled telecommunications service providers, may receive preferential treatment from the regulatory authorities and benefit from the resources of their shareholders; |
• | current or future relationships among our competitors and third parties may restrict our access to critical systems and resources; |
• | new competitors or alliances among competitors could rapidly acquire significant market share, and we may not be able to form similar relationships to capitalize on such opportunities; |
• | reduced demand for our core services of voice, messaging and data and the development of services by application developers (commonly referred to as OTT players) could significantly impact our future profitability; |
• | competitors may partner with OTT players to provide integrated customer experiences, and we may be unable to implement offers, products and technology to support our commercial partnerships; and |
• | our existing service offerings could become disadvantaged as compared to those offered by competitors who can offer bundled combinations of fixed-line, broadband, public Wi-Fi, TV and mobile. |
• | difficulties in realizing expected synergies and investment returns from acquired companies, joint ventures, investments or other forms of strategic partnerships; |
• | unsuccessful integration of personnel, products, property and technologies into our existing business; |
• | higher or unforeseen costs of integration or capital expenditure (including the time and resources of our personnel required to successfully integrate any combined businesses); |
• | difficulties relating to the acquired or formed companies’ or our partnerships’ compliance with telecommunications or other regulatory licenses and permissions, compliance with laws, regulations and contractual obligations, ability to obtain and maintain favorable interconnect terms, frequencies and numbering capacity and ability to protect our intellectual property; |
• | adverse market reactions stemming from competitive and other pressures; |
• | difficulties in retaining key employees of the merged or acquired business or strategic partnerships who are necessary to manage the relevant businesses; |
• | difficulties in maintaining uniform standards, controls, procedures and policies throughout our businesses; |
• | risks related to loss of full control of a merged business, or not having the ability to adequately control and manage an acquired business, strategic partnership or investment; |
• | risks that different geographic regions present, such as currency exchange risks, competition, regulatory, political, economic and social developments, which may, among other things, restrict our ability to successfully capitalize on our acquisition, merger, joint venture or investment; |
• | adverse customer reaction to the business acquisition or combination; and |
• | increased liability and exposure to contingencies that we did not contemplate at the time of the merger, acquisition, strategic partnership or investment, including tax liabilities. |
• | restrictions or delays in obtaining additional numbering capacity, receiving new licenses and frequencies, receiving regulatory approvals for rolling out our networks in the regions for which we have licenses, receiving regulatory |
• | significant additional costs, including fines and penalties, operational burdens and other difficulties associated with not complying in a timely manner, or at all, with new or existing legislation or the terms of any notices or warnings received from the telecommunications and other regulatory authorities; and |
• | adverse rulings or audit findings by courts or government authorities resulting from a change in interpretation or inconsistent application of existing law, |
• | failure to act in good faith and in accordance with the group’s values, Code of Conduct, other policies, procedures, and internal standards; |
• | failure to comply with applicable laws or regulations, or association, real or perceived, with illegal activity; |
• | failures in corporate governance, management or systems; |
• | association with controversial practices, customers, transactions, projects, countries or governments; |
• | association with controversial business decisions, including but not limited to, those relating to existing or new products, delivery channels, promotions/advertising, acquisitions, representation, sourcing/supply chain relationships, locations, or treatment of financial transactions; or |
• | association with poor employment or human rights practices. |
• | the success of competitive products or technologies; |
• | the issuance of new shares or sales of shares by major shareholders or the perception that such issuances or sales could occur; |
• | regulatory developments in the foreign countries in which we operate; |
• | developments or disputes concerning licenses or other proprietary rights; |
• | the recruitment or departure of key personnel; |
• | quarterly or annual variations in our financial results or those of companies that are perceived to be similar to us; |
• | market conditions in the industries in which we compete and issuance of new or changed securities analysts’ reports or recommendations; |
• | the failure of securities analysts to cover our shares or changes in financial estimates by analysts; |
• | investor perception of our company and of the industry in which we compete; and |
• | general economic, political and market conditions. |
Name of significant subsidiary | Country of incorporation | Nature of subsidiary | Percentage of ownership interest | |
VEON Amsterdam B.V. | Netherlands | Holding | 100.0 | % |
VEON Holdings B.V. | Netherlands | Holding | 100.0 | % |
PJSC VimpelCom | Russia | Operating | 100.0 | % |
JSC “Kyivstar” | Ukraine | Operating | 100.0 | % |
LLP “KaR-Tel” | Kazakhstan | Operating | 75.0 | % |
LLC “Unitel” | Uzbekistan | Operating | 100.0 | % |
LLC “VEON Georgia” | Georgia | Operating | 80.0 | % |
CJSC “VEON Armenia” | Armenia | Operating | 100.0 | % |
LLC “Sky Mobile” | Kyrgyzstan | Operating | 50.1 | % |
VEON Luxembourg Holdings S.à r.l. | Luxembourg | Holding | 100.0 | % |
VEON Luxembourg Finance Holdings S.à r.l. | Luxembourg | Holding | 100.0 | % |
VEON Luxembourg Finance S.A. | Luxembourg | Holding | 100.0 | % |
Global Telecom Holding S.A.E. | Egypt | Holding | 99.5 | % |
Omnium Telecom Algérie S.p.A.* | Algeria | Holding | 45.4 | % |
Optimum Telecom Algérie S.p.A.* | Algeria | Operating | 45.4 | % |
Pakistan Mobile Communications Limited | Pakistan | Operating | 85.0 | % |
Banglalink Digital Communications Limited | Bangladesh | Operating | 100.0 | % |
Russia | We have interconnection agreements with mobile and fixed-line operators in Russia. During 2019, we had the following MTRs in Russia: average cost per minute of national traffic 0.9367 RUB (US$ 0.0145) and average price per minute of national traffic 0.9861 RUB (US$ 0.0152), which were broadly stable as compared to the 2018 and 2017 historical periods. |
Pakistan | In the territories of Pakistan and Azad Jammu and Kashmir (“AJK”) and Gilgit-Baltistan, we have several interconnection agreements with mobile and fixed-line operators. Our MTRs in 2018 and 2019, were at PKR 0.9 (US$0.00739) and PKR 0.8 (US$0.0053), respectively, and in 2020 it is PKR 0.70 (US$0.00452). |
Algeria | We have interconnection agreements with mobile, VoIP and fixed-line operators. For the 2016-2017 period, the evolution of MTRs was favorable to our business despite an asymmetry with our competitors. For the 2017-2018 period, our MTR remained stable and the asymmetry was reduced both in scope (with one competitor instead of two benefitting from the asymmetry) and in value (the gap between MTRs was reduced). In the reference interconnection offer approved for the 2018-2019 period, the ARPCE imposed symmetrical MTRs for all three operators both for voice and SMS (respectively 0.95 DA for voice and 1.5 for SMS). In the last Reference Interconnect Offer (2019-2020), Autorité de Régulation de la Poste et des Communications Electroniques (the “ARPCE”) returned to the asymmetry for voice MTR (0.95, 0.74, and 0.67 for Ooredoo, Mobilis, and DJEZZY, respectively) while maintaining symmetry for SMS (1.5 DA). |
Bangladesh | We have interconnection agreements with interconnection exchange (ICX) operators, international gateway (IGW) operators, mobile operators, internet protocol telephony service providers (IPTSPs) and fixed-line operators. The international termination rate was changed, effective February 14, 2020, after which the minimum termination rates became US$ 0.006/min. IGW conducts revenue sharing based on the minimum international call termination rate, of which 22.5% is shared with MNOs. The domestic termination rate has been changed to BDT 0.14/min or US$0.0017/min (terminating MNO gets BDT 0.10 (US$0.0012) and ICX gets BDT 0.04 (US$0.0005)), effective August 14, 2018. |
Ukraine | We have interconnection agreements with various mobile and fixed-line operators. Effective January 1, 2019, MTR rates in Ukraine were reduced from UAH 0.15/min (US$ 0.0057) to UAH 0.12/min (US$0.0046). IMTR rates remain at current rate EUR 0.10/min. |
Uzbekistan | We have interconnection agreements with various mobile and fixed-line operators. On September 5, 2017, the State Committee of Uzbekistan on Privatization, Demonopolization and Development of Competition (“State Committee of Uzbekistan”) issued an injunction requiring Unitel LLC to implement equal mobile termination rates for all national operators. Unitel LLC unsuccessfully challenged this injunction in Uzbek Courts. Our MTR for 2019 was UZS 0.05/minute as established by the court decision. |
Kazakhstan | We have interconnection agreements with mobile and fixed-line operators. Our MTR for 2019 for local mobile operators was 5.60 KZT/min. (VAT including approximately US$0.0148; regulated) and 14.80 KZT/minute (VAT including approximately US$0.0391) for fixed-line operators. |
Mobile Service Description | Russia | Pakistan | Algeria | Bangladesh | Ukraine | Uzbekistan | Kazakhstan | Others(3) |
Value added and call completion services (1) | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
National and international roaming services(2) | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes |
Wireless Internet access | Yes | Yes | Yes | Yes | Yes(4) | Yes | Yes | Yes |
Mobile financial services | Yes | Yes | Yes | Yes | Yes(5) | Yes | Yes | No/Yes(7) |
Mobile bundles | Yes | Yes | Yes | Yes | Yes | Yes | Yes | Yes(6) |
(1) | Value added services include messaging services, content/infotainment services, data access services, location based services, media, and content delivery channels. |
(2) | Access to both national and international roaming services allows our customers and customers of other mobile operators to receive and make international, local and long-distance calls while outside of their home network. |
(3) | For a description of the mobile services we offer in Kyrgyzstan, Armenia, and Georgia, see “—Mobile Business in Others.” |
(4) | Includes 4G |
(5) | Includes Smart Money (payment method for services via mobile phone) |
(6) | Reflects mobile bundles provided in Armenia and Kyrgyzstan. |
(7) | Reflects services offered in Armenia and Kyrgyzstan. |
Voice |
• airtime charges from mobile postpaid and prepaid customers, including monthly contract fees for a predefined amount of voice traffic and roaming fees for airtime charges when customers travel abroad |
Internet and Data Access |
• GPRS/EDGE; 3G/HSPA; 4G/LTE; special wireless “Plug&Play” USB modems |
Roaming |
• active roaming agreements with 706 GSM networks in 214 countries |
• GPRS roaming with 606 networks in 189 countries |
• 4G/LTE roaming with 325 networks in 133 countries |
• roaming agreements generally state that the host operator bills PJSC VimpelCom for roaming services; PJSC VimpelCom pays these charges and then bills the customer for these services on a monthly basis |
VAS |
• caller-ID; voicemail; call forwarding; conference calling; missed call notification (via text); call blocking and call waiting |
Messaging |
• SMS (consumer and corporate); MMS and voice messaging (allows customers to send pictures, audio and video to mobile phones and to e-mails); mobile instant messaging |
Content/infotainment |
• voice services (including referral services); content downloadable to telephone (including music, pictures, games and video); RBT; mobile cloud solutions; geo-positioning and compass service for fleet and assets management; and M2M control center solution for all M2M/IoT verticals, Smart TV services, including Beeline TV |
Mobile financial services |
• Mobile payment; banking card; trusted payment; loans repayments; remittances; banks notification; and mobile insurance |
Services | License | Expiration |
Super-regional GSM (GSM900, GSM1800, GSM900/1800, UMTS 900 and 4G/LTE 1800 standards) | Moscow, Central and Central Black Earth, North Caucasus, North-West, Siberia, Ural and Volga | September 2022- April 2023 (various dates) |
GSM(1) (GSM900, GSM1800, GSM900/1800 and 4G/LTE 1800 standards) | Regions in the Far East super-region of Russia | 2021 - 2025 (various dates) |
Orenburg region | June 2020 | |
Irkutsk region | 2021 (various dates) | |
3G(2) (UMTS/LTE) | Nationwide(4) | May 2022 |
4G(3) (LTE) | Nationwide(4) | July 2022 |
4G/LTE 2600 | 32 districts of Russia | April 2026 |
(1) | In total, our GSM licenses cover approximately 97% of Russia’s population. |
(2) | PJSC VimpelCom holds one of three 3G licenses in Russia. |
(3) | In July 2012, PJSC VimpelCom was awarded a mobile license, a data transmission license, a voice transmission license and a telematic license for the provision of 4G/LTE services in Russia. These licenses allow PJSC VimpelCom to provide services using radio-electronic devices in Russia via networks that use 4G/LTE standard equipment within any of the following frequency bands: 735-742.5/776-783.5 MHz; 813.5-821/854.5-862 MHz; and 2550-2560/2670-2680 MHz. Certain channels allocated to us in accordance with the licenses have restrictions on their use. To remove restrictions, we have to perform organizational technical measure field tests. The rollout of the 4G/LTE network is using a phased approach based on a pre-defined schedule pursuant to the requirements of the license. |
(4) | This includes 83 regions of Russia, except for Republic of Crimea and Sevastopol. |
LICENSE FEES |
PJSC VimpelCom must pay an annual fee for the use of radio frequency spectrum. These fees were RUB 3,946 million and RUB 5,508 million for the years ended December 31, 2019 and 2018, respectively. Under Federal Law No. 126 FZ “On Communication” and license terms, PJSC VimpelCom is required to make universal service fund contributions in the amount equal to 1.2% of corporate revenues from provided communications services. Universal service fund contributions were RUB 2,345 million and RUB 2,404 million for the years ended December 31, 2019 and 2018, respectively. PJSC VimpelCom is also subject to certain other license fees on a case-by-case basis. |
Operator | Customers in Russia (in millions) |
MTS | 71.7 |
MegaFon | 68.7 |
PJSC VimpelCom | 52.0 |
Tele2 | 44.2 |
Voice |
• airtime charges from mobile postpaid and prepaid customers, including monthly contract fees for a predefined amount of voice traffic and roaming fees for airtime charges when customers travel abroad |
Internet and data access |
• GPRS, EDGE, 3G and 4G/LTE |
Roaming |
• active roaming agreements with 326 GSM networks in 148 countries |
• GPRS roaming with 248 networks in 116 countries |
• CAMEL roaming through 122 networks in 67 countries |
• roaming agreements generally state that the host operator bills PMCL for the roaming services; PMCL pays these charges and then bills the customer for these services on a monthly basis |
VAS |
• caller-ID; voicemail; call forwarding; conference calling; call blocking and call waiting |
Messaging |
• SMS, MMS (which allows customers to send pictures, audio and video to mobile phones and to e-mail), and mobile instant messaging |
Content/infotainment |
• ecosystem of digital services: mobile TV, music and live audio streaming, video streaming, mobile magazine, sports (including cricket), mega deals |
Mobile financial services(1) |
• mobile payment; banking card; trusted payment; banks notification; and mobile insurance |
(1) | Mobilink Microfinance Bank Limited (“Mobilink Bank”), our wholly owned subsidiary owned through Global Telecom Holding SAE, carries on a microfinance banking business and provides certain MFS, DFS and traditional banking services (including the granting of microfinance loans, provision of credit, payment and transfer services and a variety of other banking services) in Pakistan under license granted by the State Bank of Pakistan and is subject to regulation by the State Bank of Pakistan. In partnership with Jazz, Mobilink Bank offers mobile wallets and payment services under the brand “Jazz Cash”. |
Services | License(1)(3) | Expiration |
2G(3) | Nationwide | 2022 |
Nationwide | 2019 (2) | |
3G | Nationwide | 2029 |
4G/LTE (NGMS) | Nationwide | 2032 |
Nationwide | 2019 (2) |
(1) | Warid (now merged with Jazz) acquired a 15-year technology neutral license in 2004 for US$291 million. US$145.5 million was paid upfront with the remainder paid in ten equal annual installments starting with a four-year grace period, with the last payment made May 2018. The same 2G license was amended in December 2014 by the Pakistan Telecommunication Authority (“PTA”) to allow Warid to provide 4G/LTE services in Pakistan. Additionally, the National Accountability Bureau is currently conducting an investigation into certain former PTA and other officials, and has requested information from Jazz concerning Warid’s 2014 license amendment while the investigation is ongoing. |
(2) | The ex-Warid license renewal was due in May 2019. Pursuant to directions from the Islamabad High Court, the PTA issued a license renewal decision on July 22, 2019 requiring payment of US$39.5 million per MHz for 900 MHz spectrum and US$29.5 million per MHz for 1800 MHz spectrum, equating to an aggregate price of approximately US$450 million (excluding advance tax of 10%). On August 17, 2019, Jazz appealed the PTA’s order to the Islamabad High Court. On August 21, 2019, the Islamabad High Court suspended the PTA’s order pending the outcome of the appeal and subject to Jazz making payment in the form of security (under protest) as per the options given in the PTA’s order. In September 2019, Jazz deposited approximately US$225 million in order to maintain its appeal in the Islamabad High Court regarding the PTA’s underlying decision on the license renewal. There were no specific terms and conditions attached to the deposit. The deposit is recorded as a non-current financial assets in the statement of financial position. The next hearing date before the Islamabad High Court is April 9, 2020 |
(3) | In addition, PMCL and its subsidiaries have other licenses, including LDI, WLL, local loop licenses, licenses to provide non-voice communication services, and licenses to provide class VAS in Pakistan, AJK and Gilgit-Baltistan. The licensees must also pay annual fees (0.5%) to the PTA and make universal service fund contributions (1.5%) and/or research and development fund contributions (0.5%), as applicable, in a total amount equal to a percentage of the licensees’ annual gross revenues (less certain allowed deductions) for such services. |
(4) | In 2007, PMCL renewed its 2G license for a further term of 15 years. As of December 31, 2019, PMCL had paid its outstanding balance of US$14.5 million to the PTA for the renewal of its 2G license (paid on December 5, 2019). This amount had been payable in yearly installments of US$14.5 million, payable in December of each year, until December 2019. PMCL has two 15-year licenses for provision of cellular mobile 2G services in AJK and Gilgit-Baltistan. |
LICENSE FEES |
Under the terms of its 2G, 3G and 4G/LTE licenses, as well as its license for services in AJK and Gilgit-Baltistan, PMCL must pay annual fees to the PTA and make universal service fund contributions and/or research and development fund contributions, as applicable (not all of the foregoing are applicable to all licenses), in a total amount equal to 2.5% of PMCL’s annual gross revenues (less certain allowed deductions) for such services, in addition to spectrum administrative fees. |
PMCL’s total license fees (annual license fees plus revenue sharing) in Pakistan (excluding the yearly installments noted above) were US$24.7 million, US$26.9 million, and US$26.7 million for the years ended December 31, 2019, 2018 and 2017, respectively. PMCL’s total spectrum administrative fee payments, including for Warid’s spectrum, were US$1.6 million, US$1.9 million, and US$1.5 million for the years ended December 31, 2019, 2018, and 2017, respectively. |
Operator | Customers in Pakistan (in millions) |
PMCL (“Jazz”) | 60.5 |
Telenor Pakistan | 45.7 |
Zong | 35.8 |
Ufone | 23.4 |
Voice |
• airtime charges from mobile postpaid and prepaid customers, including monthly contract fees for a predefined amount of voice traffic and roaming fees for airtime charges when customers travel abroad |
Internet and data access |
• GPRS, EDGE, 3G and 4G/LTE technology |
• data services available via pay-per-use and via a bundle |
Roaming |
• active roaming agreements with 458 GSM networks in 158 countries |
• GPRS roaming with 316 networks in 119 countries |
• 3G roaming with 250 networks in 109 countries |
• 4G/LTE roaming with 73 networks in 39 countries |
• GPRS, EDGE, 3G and 4G/LTE technology |
• roaming agreements generally state that the host operator bills OTA for roaming services; OTA pays these charges and then bills the customer for these services on a monthly basis |
VAS |
• caller-ID; call forwarding; conference calling; call blocking; call waiting; beep call; verso+; collect SMS; VMS vocal message service; A2P; and short code third party services |
Messaging |
• SMS, MMS (which allows customers to send pictures, audio and video to mobile phones and to e-mail), and mobile instant messaging |
Content/infotainment |
• mobile message notification service offering packages with various types of content (sports, news, food, culture) (SMS SCOOP); ring back tunes (RBT); co-branding with VTC service app (Yassir); game portal |
Mobile financial services |
• peer-to-peer credit transfer and credit loan |
Services | License | Expiration |
2G(1) | Nationwide | 2021 |
VSAT(2) | Nationwide | 2019 |
3G(3) | Nationwide | 2028 |
4G/LTE(4) | Nationwide | 2031 |
(1) | In 2001, OTA was awarded a 15-year license to operate a 2G telecommunications network for an aggregate fee of approximately US$737 million. The license expired in 2016 and was renewed for a five-year period at no additional cost (Decree 17-195 of June 11, 2017). |
(2) | In 2003, OTA acquired a VSAT data-voice license for an aggregate fee of US$2.05 million and renewed the license in 2014 for an additional period of five years, at no additional cost. This license expired in April 2019, and, a new license agreement was signed in September 2019 between Optimum, ARPCE and MPT, with publication of the executive decree finalizing the renewal expected by December 2020. |
(3) | In 2013, OTA was awarded a 15-year license to operate a 3G telecommunications network for an aggregate fee of approximately US$38 million, which was paid in full in 2013. Under the terms of its 3G license, OTA is required to pay an additional annual revenue sharing fee of 1% based on 3G revenues less interconnection costs. |
(4) | Under the terms of its 4G/LTE license, Optimum is required to pay an additional annual revenue sharing fee of 1% based on 4G/LTE revenues less interconnection costs. |
LICENSE FEES |
Under the terms of its 2G, 3G, 4G/LTE and VSAT licenses, OTA is required to pay contributions for the universal service and environmental protection fund (3% of revenues); management of the numbering plan (0.2% of revenues less interconnection costs); research, training and standardization (0.3% of revenues less interconnection costs); license fees for 3G and 4G licenses (1% of revenue less interconnection costs; and a new tax (0.5% of revenues excluding VSAT) introduced in the 2018 Finance Law. OTA’s total license fees in Algeria were US$65.1 million, US$62.6 million, and US$61.8 million for the years ended December 31, 2019, 2018 and 2017, respectively, of which US$27.8 million, US$28.1 million, and US$28.1 million, respectively, was related to spectrum charges, and US$37.3(1) million, US$34.5 million, and US$33.7 million, respectively, was related mainly to contributions made to the Universal Services of Telecommunications fund and to the number plan management over the same periods. |
(1) | Reflects a change of the universal services tax calculation rule, from a calculation base of 3% of total revenue less interconnection cost to a calculation base of 3% of total revenue, with retroactivity on 2018 (impact of US$2.2 million of 2018 reported on 2019). |
Operator | Customers in Algeria (in millions) |
Mobilis | 21.6 |
Optimum (“Djezzy”) | 14.6 |
Ooredoo | 12.6 |
Voice |
• airtime charges from mobile postpaid and prepaid customers, including voice packs and mixed bundles |
Internet and data access |
• GPRS, EDGE, 3G and 4G/LTE technology |
• data services provided via pay-per-use and via a bundle |
Roaming |
• active roaming agreements with 400 GSM networks in 145 countries |
• GPRS roaming with 301 networks in 115 countries |
• maritime roaming and in-flight roaming |
• roaming agreements generally state that the host operator bills BDCL for roaming services; BDCL pays these charges and then bills the customer for these services on a monthly basis |
VAS |
• call forwarding; conference calling; call blocking; call waiting; caller line identification presentation; call me back; and voicemail missed call alert |
Messaging |
• SMS, MMS (which allows customers to send pictures, audio and video to mobile phones and to e-mail) and mobile instant messaging |
Content/infotainment |
• news alert service; sports related content; job alerts; music streaming; mobile TV; content download; religious content; and RBT |
Mobile financial services |
• SMS and data network is provided to Bangladesh Post Office for their Mobile Money Order service |
Services | License | Expiration |
2G(1) | Nationwide | 2026 |
3G(2) | Nationwide | 2028 |
4G/LTE(3) | Nationwide | 2033 |
(1) | In November 1996, BDCL was awarded a 15-year GSM license to establish, operate and maintain a digital mobile telephone network to provide 2G services throughout Bangladesh. The license was renewed in November 2011 for a further 15-year term. |
(2) | In September 19, 2013, following a competitive auction process, BDCL was awarded a 15-year license to use 5 MHz of technology neutral spectrum in 2100MHz band and was also awarded a 3G license, for which it paid a total cost of BDT 8,677.4 million (inclusive of 5% VAT), including both a license acquisition fee and a spectrum assignment fee. |
(3) | On February 13, 2018, BDCL acquired a 4G/LTE license for US$1.2 million. BDCL also acquired the right to use 10.6 MHz technology neutral of spectrum in 1800 MHz (5.6) and 2100 MHz (5) for US$323 million including VAT (33.34% of the fee has been considered as tariff value for 15% VAT). Banglalink also converted 15MHz of existing 2G spectrum for US$37.01 million. |
LICENSE FEES |
Under the terms of its 2G, 3G and 4G/LTE mobile licenses, BDCL is required to pay to the Bangladesh Telecommunication Regulatory Commission (i) an annual license fee of BDT 50.0 million (US$0.6 million as of December 31, 2019) for each mobile license; (ii) 5.5% of BDCL’s annual audited gross revenue, as adjusted pursuant to the applicable guidelines; and (iii) 1% of its annual audited gross revenue (payable to Bangladesh’s social obligation fund), as adjusted pursuant to the applicable guidelines. The annual license fees are payable in advance of each year, and the annual revenue sharing fees are each payable on a quarterly basis and reconciled at the end of each year. BDCL’s total license fees (annual license fees plus revenue sharing) in Bangladesh were equivalent to US$36.9 million, US$34.7 million, and US$38.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. In addition to license fees, BDCL pays annual spectrum charges to the BTRC, calculated according to the size of BDCL’s network, its frequencies, the number of its customers and its bandwidth. The annual spectrum charges are payable on a quarterly basis and reconciled at the end of each year. BDCL’s annual spectrum charges were equivalent to US$11.8 million, US$11.8 million, and US$9.08 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
Operator | Customers in Bangladesh (in millions) |
Grameenphone | 76.5 |
Robi Axiata | 49.0 |
BDCL (“banglalink”) | 33.6 |
Teletalk | 4.9 |
Voice |
• airtime charges from mobile postpaid and prepaid customers, including monthly contract fees for a predefined amount of voice traffic and roaming fees for airtime charges when customers travel abroad |
Internet and data access |
• GPRS/EDGE, 3G and 4G/LTE |
Roaming |
• active roaming agreements for 493 networks in 189 countries |
• GPRS roaming on 431 networks in 167 countries |
• 3G roaming on 316 networks in 133 countries |
• 4G/LTE roaming on 75 networks in 56 countries |
Messaging |
• SMS; MMS; voice messaging and SMS services (including information services such as news, weather, entertainment chats and friend finder) |
Content/infotainment |
• voice services (including referral services); content downloadable to telephone (including music, pictures, games and video); mobile TV and RBT |
Mobile financial services |
• mobile payment; banking card; trusted payment; banks notification; mobile insurance; and Smart Money (payment method for services via mobile phone) |
Services | License | Expiration |
GSM900 and GSM1800(1) | Nationwide | October 5, 2026(4) |
3G(2) | Nationwide | April 1, 2030 |
4G/LTE(3) | Nationwide | July 1, 2033 (1800 MHz) |
4G/LTE(3) | Nationwide | January 31, 2033 (2600 MHz) |
(1) | Licenses were received on October 5, 2011 for a term of 15 years each. |
(2) | The license was issued on April 1, 2015 for a term of 15 years. Services provided in the 2100 MHz band. We have also obtained a range of national and regional radio frequency licenses for the use of radio frequency resources in the referred standards and in specified standards— radio-relay and WiMax. Our network coverage is (except the Anti-Terrorist Operation zone where Kyivstar is not able to use and control its network): 91.46% of the 2G network; 18.7% of the 3G network; 9,864 localities covered by 2G network; and 25,484 localities covered by 3G network. |
(3) | Kyivstar secured 4G/LTE licenses and spectrum in two separate transactions in 2018. Following the auction held on January 31, 2018, Kyivstar acquired 15 MHz (paired) of contiguous frequency in the 2600 MHz band for UAH 0.9 billion (US$32 million as of December 31, 2017). In addition, on March 6, 2018, Kyivstar secured the following spectrum through auction in the 1800MHz band: 25MHz (paired) for UAH 1.325 billion (US$47 million as of December 31, 2017) and two lots of 5MHz (paired) for UAH 1.512 billion (US$54 million as of December 31, 2017). |
(4) | The date is valid for licenses to provide telecommunications services. Due to the changes to legislation that came into force on December 24, 2019, extensions and renewals of these licenses will not be required in future. The licenses for the radio frequency resource in 900 MHz are currently (as of February 27, 2020) being re-issued as part of a government project on 900 MHz redistribution and refarming as a way to introduce 4G (LTE) into 900 MHz. As a result of this project, Kyivstar returned 12.5 MHz and received back on average across the country 11.9 MHz, out of which 6.2 MHz was provided with technological neutrality license conditions. |
LICENSE FEES |
In 2019, Kyivstar PJSC made spectrum and license payments as follows: annual fee for the use of radio frequency spectrum - UAH 991 million (paid to the State Budget); EMC monitoring - UAH 226.3 million (paid to Ukrainian State Center of Radio Frequencies); and an extension of existing licenses and acquisition of new licenses (13 licenses in all) on use of radio frequency spectrum and fixed line services - UAH 23.1 million (paid to the State Budget). |
Operator | Customers (in millions) |
Kyivstar | 26.2 |
“VF Ukraine” JSC | 19.6 |
“lifecell” LLC | 7.4 |
Voice |
• airtime charges from mobile postpaid and prepaid customers, including monthly contract fees for a predefined amount of voice traffic and roaming fees for airtime charges when customers travel abroad |
• GSM service is provided in 2G and 3G networks; call duration for one session is limited to 40 minutes |
Internet and data access |
• GPRS/EDGE/3G/4G/LTE networks |
Roaming |
• active roaming agreements with 487 GSM networks in 186 countries |
• GPRS roaming with 392 networks in 164 countries |
• CAMEL roaming through 287 networks in 123 countries |
• roaming agreements generally state that the host operator bills us for roaming services; we pay these charges and then bill the customer for these services on a monthly basis |
VAS |
• caller-ID; voicemail; call forwarding; conference calling; call blocking; and call waiting |
Messaging |
• SMS and voice messaging |
Content/infotainment |
• voice services (including referral services), content downloadable to telephone (including music, pictures, games and video), RBT, SMS content services (including information services such as news, weather, entertainment chats and friend finder) and proprietary digital content services (including Beeline TV and Beeline music) |
Mobile financial services |
• proprietary payment system “Beepul” (including card-to-card transfer); bank card payments; and trusted payment |
Services | License | Expiration |
GSM900/1800(1) | Nationwide | August 7, 2031 |
3G(1) | Nationwide | August 7, 2031 |
4G/LTE(1) | Nationwide | August 7, 2031 |
International Communication Services License | Nationwide | 2026 |
Data Transfer | Nationwide | Unlimited/June 2020(2) |
Inter-city communication services license | Nationwide | 2026 |
TV broadcasting | Nationwide | 2023 |
(1) | Requires annual license fee payments. |
(2) | License for exploitation of the data transfer network does not have a fixed term, and license for design, construction and service provision of data transfer network expires in June 2020. |
LICENSE FEES |
In 2019, Unitel LLC made payments for spectrum and licenses with the following split: the annual fee for use of radio frequency spectrum in the total amount of US$3,246,693 and renewal of existing licenses (7 licenses in total) in the total amount of US$3,239,835 paid to the state budget of Ministry for Development of Information Technologies and Communications. |
Operator | Customers (in millions) |
LLC “Unitel” | 8.1 |
Ucell | 7.1 |
UzMobile (Uzbektelecom) | 4.8 |
UMS | 3.0 |
Perfectum | 0.3 |
Voice |
• Standard voice services |
• Prepaid and postpaid airtime charges from customers, including weekly and monthly contract fees for a predefined amount of voice traffic and roaming fees for airtime usage when customers travel abroad |
Internet and data access |
• 3G and 4G/LTE service |
• technology neutral licenses |
Roaming |
• Voice roaming with 561 networks in 191 countries |
• 4G/LTE roaming with 174 networks in 77 countries |
• GPRS roaming with 472 networks in 152 countries |
• CAMEL roaming through 351 networks in 137 countries |
• roaming agreements generally state that the host operator bills us for roaming services; we pay these charges and then bill the customer for these services on a monthly basis |
VAS |
• caller-ID; voicemail; call forwarding; call blocking; trusted payment; receiving party pays (RPP); callback services; mobile transfer (transferring funds from the balance of one subscriber to the balance of another) |
Messaging |
• SMS; display of Beeline account balance information |
Content/infotainment |
• Brand Content (including Yandex, ZVOOQ, Book.beeline.kz, Viktorina, RBT) • Non-Brand (including Voice CPA, Content), SMS inform, free phone |
Mobile financial services |
• proprietary payment system “Beepul” (including card-to-card transfer); bank card payments; and trusted payment |
Licenses (as of December 31, 2019) | Expiration |
Mobile services (GSM900/1800, UMTS/WCDMA2100, 4G/LTE800/1800) | Unlimited term |
(1) | License received on August 24, 1998. |
(2) | KaR-Tel has permission to use of spectrum in 800 MHz, 900 MHz, 1800 MHz and 2100 MHz for mobile services and in 2.5-2.6 GHz, 3.3-3.5 GHz, and 5,5 GHz for wireless access to internet (WLL). |
(3) | Upfront payments in US$ are: 800 MHz (US$62,691,378) in 2016, 900 MHz (US$67,500,000) in 1998, 1800 MHz (US$10,958,904) for 4G in 2016, 2G (US$20,783,107) in 2008, and 2100 MHz (US$34,106,412) in 2010. |
LICENSE FEES |
Under the Kazakhstan tax code, in 2019 KaR-Tel was required to pay: (i) an annual fee for the use of radio frequency spectrum amounting to KZT 5,632,286,663 for mobile and KZT 141,685,472.30 for a wireless local loop (WLL); and (ii) a mobile services provision payment amounting to 1.3992% of corporate revenues from provided communications services, which totaled KZT 1,743,099,899. |
Operator | Customers (in millions) |
Beeline Kazakhstan | 10.4 |
Telia Company (Kcell) | 8.2 |
Tele2/Altel | 7.3 |
Payment Plan | Kyrgyzstan | Armenia | Georgia |
Prepaid | 95.4% | 87.5% | 100% |
Postpaid | 4.6% | 12.5% | —% |
Voice | |
• Standard voice services | |
• Prepaid and postpaid airtime charges from customers, including weekly and monthly contract fees for a predefined amount of voice traffic and roaming fees for airtime usage when customers travel abroad. | |
Internet and Data Access | |
• 3G and 4G/LTE services in each of Kyrgyzstan, Armenia, and Georgia | |
• technology neutral licenses in each of Kyrgyzstan, Armenia, and Georgia | |
Roaming | |
Kyrgyzstan | Voice: 429 networks in 130 countries |
GPRS: 260 networks in 99 countries | |
4G/LTE: 49 networks in 34 countries | |
CAMEL: 198 networks in 86 countries | |
Armenia | Voice: 439 networks in 184 countries |
GPRS: 361 networks in 139 countries | |
CAMEL: 271 networks in 113 countries | |
3G: 312 networks in 131 countries | |
4G/LTE: 143 networks in 82 countries | |
Georgia | Voice: 230 networks in 92 countries |
GPRS: 209 networks in 83 countries | |
CAMEL: 167 networks in 67 countries | |
• roaming agreements generally state that the host operator bills for roaming services; we pay these charges and then bill the customer for these services (in some cases on a monthly basis) | |
VAS | |
• caller-ID; voicemail; call forwarding; conference calling; call blocking and call waiting | |
Messaging | |
• SMS, MMS, voice messaging and mobile instant messaging | |
Content/infotainment | |
• SMS CPA, Voice CPA, RBT, voice services (including referral services), content downloadable to telephone (including music, pictures, games and video); access to radio or television broadcasting online or via mobile app | |
Mobile financial services | |
• balance transfer, trusted payment, mobile wallet |
Country | Licenses (as of December 31, 2019) | Expiration |
Kyrgyzstan | Radio spectrum of 800 MHz for the entire territory of Kyrgyzstan (technology neutral) 796-801MHz/837-842MHz | September 2025 |
Radio spectrum of 800 MHz for the entire territory of Kyrgyzstan (technology neutral) 791-796MHz/832-837MHz | December 2026 | |
Radio spectrum of 900 MHz, 1800 MHz and 2100 MHz for the entire territory of Kyrgyzstan (technology neutral) | October 2024 | |
National license for electric communication service activity | Unlimited term | |
National license for base station transmission | December 2024 | |
National license for services on data traffic | Unlimited term | |
Armenia(1) | Network operation for the entire territory of Armenia | March 2028 |
National licenses to use radio spectrum of 900 MHz, 1800 MHz and 2100 MHz for the entire territory of Armenia (technology neutral) | March 2023 April 2029 June 2029 | |
Georgia | GSM1800 10 MHz frequency | February 2030 |
GSM900 5.49 MHz frequency | February 2030 | |
LTE 800 10 MHz frequency | February 2030 | |
10 MHz 3G frequency | December 2031 |
(1) | The license is valid for both fixed/mobile operations countrywide |
2019 (millions of customers) | Mobile Penetration | 2018 (millions of customers) | Mobile Penetration | |
Kyrgyzstan | 2.3 | 126.8% | 2.6 | 121.5% |
Armenia | 0.9 | 127.6% | 1.0 | 125.9% |
Georgia | 1.4 | 134.8% | 1.3 | 133.2% |
Services |
• network access and hardware and software solutions, including configuration and maintenance, SaaS and an integrated managed service |
• local access services by connecting the customers’ premises to our own fiber network, international and domestic long-distance services and VSAT services to customers located in remote areas |
• internet access to both corporate and consumer customers through backbone networks and private line channels |
• IP address services, the ability to rent leased channels with different high-speed capacities and remote access to corporate information, databases and applications. |
• managed Wi-Fi networks based on IEEE 802.11b/g/n/ac wireless technology |
• virtual PSTN number, xDSL services, session initiation protocol (SIP) connection, financial information services, data center services, such as co-location, web hosting, audio conference and domain registration services |
• IPTV services (1.45 million customers), virtual PBX, certain Microsoft Office packages (including SaaS), web-videoconferencing services and sale, rental and technical support for telecommunications equipment |
• Pay TV (cable TV) (25,591 customers) |
• OTT TV (TVE) |
• FMC product services (1,334,834 customers) |
• carrier and operator services, including voice, internet and data transmission over our own networks and roaming services |
• MPLS-based IP VPN, local, domestic and international private lines, equipment and equipment maintenance (under interconnection agreements with international global data network operators |
• high-speed domestic and international channels to international and Russian operators to sell excess backbone network capacity |
Coverage |
• all major population centers |
• 40 regions of Russia (175 cities covered by FTTB network), including FVNO projects |
Operations |
• operate a number of competitive local exchange carriers that operate fully digital overlay networks in a number of major Russian cities |
Customers |
• FTTB and FMC |
• large multinational corporate groups |
• government clients |
• SMEs |
• high-end residential buildings in major cities |
Voice Services | ||
• Rostelecom | • TransTelecom | • OJSC “Multiregional TransitTelecom” |
Data Services | ||
• Rostelecom | • TransTelecom | • MegaFon |
Fixed-line Broadband | ||
• Rostelecom | • Akado | • NetbyNet |
• MTS and its subsidiaries | • ER-Telecom |
Services | License | Expiration |
Local Communications Services | Krasnodar | October 1, 2020 |
Leased Communications Circuits Services | St. Petersburg | June 8, 2020 |
Intra-zone Communication Services | Krasnodar | December 12, 2020 |
Telematic Services | Krasnodar | September 14, 2020 |
Moscow | November 21, 2020 | |
St. Petersburg | November 21, 2020 | |
Data Transmission Services License | Krasnodar | September 14, 2020 |
Services |
• data, voice and VAS services over a wide range of access media, covering the major cities |
• data services being provided to the enterprise customers include: dedicated internet access, VPN (virtual private networking), leased lines & fixed telephony |
• domestic and international leased lines, domestic and international MPLS, and IP transit services through our access network1 |
• high-speed internet access (including fiber optic lines) |
• telephony |
• telephone communication services, based on modern digital fiber optic network |
• dedicated lines of data transmission |
• dedicated line access and fixed-line mobile convergence |
Coverage |
• wired and wireless access services include FTTx, PMP (point to multipoint), point-to-point radios, VSAT, and WiMax connecting more than 225 locations across Pakistan |
Operations |
• long-haul fiber optic network covers more than 10,000 kilometers and, supplemented by wired and wireless networks |
Customers |
• enterprise customers |
• domestic and international carriers |
• corporate and individual business customers |
Internet Services | ||
• PTCL | • Wi-Tribe | • World Call |
• Wateen | ||
Carrier and Operator Services | ||
• PTCL | • Wi-Tribe | • World Call |
• Wateen | • Telenor Pakistan | |
Fixed-line Broadband | ||
• Pakistan Telecommunication Company Limited, or “PTCL” | • Cybernet | • Supernet |
• Multinet | • Nexlinx | |
• Wateen | • Nayatel |
Services | License | Expiration |
Long Distance & International (“LDI”) | Nationwide and International | 2024 |
Local Loop (“LL”) (fixed line and/or wireless local loop with limited mobility) | Regional | 2024 |
Services |
• data |
• broadband services |
• corporate internet access |
• Fixed-line: VPN services, data center, contact center, voice, fixed-line telephony and a number of VAS |
• Internet access services: ADSL, symmetrical and Ethernet interfaces at speeds ranging from 256 kilobytes per second to 10 gigabytes per second |
• FMC |
• FTTB services tariffs for fixed-line broadband internet access targeted at different customer segments |
Coverage |
• provided services in 122 cities in Ukraine (excluding cities in Crimea and the ATO zone) |
• engaged in a project to install FTTB for fixed-line broadband services in approximately 42,131 residential buildings in 122 cities, providing over 58,158 access points |
Voice Services(1), Data Services(2) and Voice Services | ||
• Ukrtelecom | • Datagroup | • Farlep-Invest (Vega) |
Retail Internet Services | ||
• Ukrtelecom | • Volia |
(1) | Voice services market for business customers only. |
(2) | Data services for corporate market only. |
Services(1) |
• fixed-line services, such as network access |
• internet and hardware and software solutions, including configuration and maintenance |
• high-speed internet access (including fiber optic lines and xDSL) |
• telephony |
• long distance and international long-distance telephony on prepaid cards |
• telephone communication services, through our copper cable network and our modern digital fiber optic network |
• dedicated lines of data transmission |
• dedicated line access and fixed-line mobile convergence |
Fixed-line Services | |
• Uztelecom | • Sharq Telecom |
• East Telecom | • TPS |
• Sarkor Telecom | • EVO |
Services | License | Expiration |
Fixed-line | Nationwide | 2021 |
Data | Nationwide | 2021 |
Long-distance | Nationwide | 2029 |
International | Nationwide | 2029 |
Services |
• PSTN-fixed telephony |
• internet, data transmission and network access |
• domestic and international voice termination |
• TCP/IP international transit traffic services |
• local telephony services |
• international and domestic long distance services |
• broadband access services (including ADSL, VDSL, LTE 450 and fiber optic lines) |
• VoIP services |
• Session Initiated Protocol telephony |
• wholesale services, such as leased line service and wholesale broadband services |
• wholesale international voice termination and origination services for other local and international operators and service providers |
• fixed-line broadband internet access based on ADSL and FTTB technologies |
• dial-up services and wireless internet access based on CDMA technology |
• FMC bundles, offering fixed internet, fixed TV and mobile services, and fixed voice services |
Fixed Internet and Cable TV Services |
• U!Com |
• Rostelcom |
Services | License | Expiration |
Fixed communication | Nationwide | 2028 |
Fixed wireless access (450 MHz (LTE450)) | Regional | 2023 |
Services |
• high-speed internet access |
• local, long distance and international voice services over IP |
• local, intercity and international leased channels and IP VPN services |
• cloud services |
• integrated corporate networks (including integrated network voice, data and other services) |
• FMC product, including mobile bundles and video content from Amediateka and IVI |
• ADSL, FTTB, Wi-Fi, WiMax, VSAT |
Internet, Data Transmission and Traffic Termination Services | |
• Kazakhtelecom | • TransTelecom (owned by Kazakhstan Temir Zholy, the national railway company) |
• KazTransCom | • Astel (a leader in the provision of satellite services) |
Services | License | Expiration |
Long-distance and International | Nationwide | Unlimited |
• | Stakeholders: By engaging with our stakeholders, we understand their concerns and expectations, and we follow a number of stakeholder-defined standards and guidelines; |
• | Materiality: Using pre-defined criteria, we prioritize by assessing individual opportunities against our strategy and their importance to our stakeholders; and |
• | Accountability: We are accountable to our stakeholders through the publication of our annual Sustainability Report. We also share periodic updates with internal stakeholders, including members of management, to inform them about key corporate responsibility-related developments and our corporate responsibility performance. |
• | Telenor Global Services AS, a Norwegian subsidiary, has an interconnection agreement with Telecommunication Company of Iran, the parent company of Mobile Telecommunication Company of Iran (“MCI”). During 2019, Telenor Global Services recorded net revenue of US$803,907.78 related to this interconnection agreement. |
• | Telenor Norge AS, a Norwegian subsidiary, has roaming agreements with MCI, MTN Irancell and Rightel. During 2019, Telenor Norge AS recorded net revenue related to these roaming agreements of €2,047.25 to MCI, net expenses of €4,611.45 to MTN Irancell and net expenses of €1,056.33 to Rightel. |
• | Telenor Sverige AB, a Swedish subsidiary, has roaming agreements with MCI and MTN Irancell and Rightel. During 2019, Telenor Sverige AB recorded net expense related to its roaming agreement with MCI of €875.91, net expenses related to its roaming agreement with MTN Irancell of €11,155.20 and net expenses related to its roaming agreement with Rightel €8,583.08. |
• | Telenor Pakistan (Private) Ltd., a Pakistani subsidiary, has roaming agreements with MCI and MTN Irancell. During 2019, Telenor Pakistan (Private) Ltd. recorded net expenses of €95.75 related to the roaming agreement with MCI and net revenue of US$54,597.57 related to the roaming agreement with MTN Irancell. |
• | Telenor A/S, a Danish subsidiary, has roaming agreements with MCI, MTN Irancell and Rightel. During 2019, Telenor A/S recorded net revenue related to its roaming agreement with MCI of €10.52, net expenses related to its roaming agreement with MTN Irancell of €6,758.26 and net expenses related to Rightel of €5,111.32. |
• | Telenor d.o.o. Beograd Omladinskih brigada 90, a Serbian subsidiary, has a roaming agreement with MCI. During 2019, Telenor d.o.o. Beograd Omladinskih brigada 90 recorded net expenses of €649.10 related to this roaming agreement. |
• | Telenor Hungary Plc, a Hungarian subsidiary, has a roaming agreement with MCI. During 2019, Telenor Hungary Plc, recorded a balance of €0 related to this roaming agreement. |
• | Telenor Bulgaria EAD, a Bulgarian subsidiary, has a roaming agreement with MCI. During 2019, Telenor Bulgaria EAD recorded net revenues of €1462.48 related to this roaming agreement. |
• | DiGi.Com Bhd, a Malaysian subsidiary, has a roaming agreement with MCI, MTN Irancell and Rightel. During 2019, DiGi.Com Bhd recorded net expenses of €5,620.14 related to MCI, net expenses of US$50.29 related to MTN Irancell and net revenues of US$9.85 related to Rightel. |
• | Total Access Communications Plc, a Thai subsidiary, had no traffic with Iran operators during 2019. |
Year ended December 31, | ||||||
In millions of U.S. dollars | 2019 | 2018 | 2017 | |||
Consolidated income statement data: | ||||||
Service revenues | 8,240 | 8,526 | 9,105 | |||
Sale of equipment and accessories | 465 | 427 | 244 | |||
Other revenues / other income | 158 | 133 | 125 | |||
Total operating revenues | 8,863 | 9,086 | 9,474 | |||
Service costs | (1,554 | ) | (1,701 | ) | (1,879 | ) |
Cost of equipment and accessories | (479 | ) | (415 | ) | (260 | ) |
Selling, general and administrative expenses | (2,965 | ) | (3,697 | ) | (3,748 | ) |
Other operating gain / (loss) | 350 | — | — | |||
Depreciation | (1,652 | ) | (1,339 | ) | (1,491 | ) |
Amortization | (394 | ) | (495 | ) | (537 | ) |
Impairment (loss) / reversal | (108 | ) | (858 | ) | (66 | ) |
Gain / (loss) on disposal of non-current assets | (43 | ) | (57 | ) | (26 | ) |
Gain / (loss) on disposal of subsidiaries | 1 | 30 | — | |||
Operating profit | 2,019 | 554 | 1,467 | |||
Finance costs | (892 | ) | (816 | ) | (935 | ) |
Finance income | 53 | 67 | 95 | |||
Other non-operating gain / (loss) | 21 | (68 | ) | (97 | ) | |
Share of profit / (loss) of joint ventures and associates | — | — | (22 | ) | ||
Impairment of joint ventures and associates | — | — | (110 | ) | ||
Net foreign exchange gain / (loss) | (20 | ) | 15 | (70 | ) | |
Profit / (loss) before tax | 1,181 | (248 | ) | 328 | ||
Income tax expense | (498 | ) | (369 | ) | (472 | ) |
Profit / (loss) from continuing operations | 683 | (617 | ) | (144 | ) | |
Profit / (loss) after tax from discontinued operations | — | (300 | ) | (390 | ) | |
Gain / (loss) on disposal of discontinued operations | — | 1,279 | — | |||
Profit / (loss) for the period | 683 | 362 | (534 | ) | ||
Attributable to: | ||||||
The owners of the parent (continuing operations) | 621 | (397 | ) | (115 | ) | |
The owners of the parent (discontinued operations) | — | 979 | (390 | ) | ||
Non-controlling interest | 62 | (220 | ) | (29 | ) | |
683 | 362 | (534 | ) |
Year ended December 31, | ||||||
In millions of U.S. dollars, includes intersegment revenue | 2019 | 2018 | 2017 | |||
Our cornerstone | ||||||
Russia | 4,481 | 4,654 | 4,729 | |||
Our growth engines | ||||||
Pakistan | 1,321 | 1,494 | 1,525 | |||
Ukraine | 870 | 688 | 622 | |||
Kazakhstan | 486 | 441 | 416 | |||
Uzbekistan | 258 | 315 | 513 | |||
Our frontier markets | ||||||
Algeria | 775 | 813 | 915 | |||
Bangladesh | 537 | 521 | 574 | |||
Other and eliminations | 135 | 160 | 180 | |||
Total segments | 8,863 | 9,086 | 9,474 |
In millions of U.S. dollars | Year ended December 31, | |||||
2019 | 2018 | 2017 | ||||
Our cornerstone | ||||||
Russia | 1,957 | 1,677 | 1,788 | |||
Our growth engines | ||||||
Pakistan | 669 | 714 | 703 | |||
Ukraine | 572 | 387 | 347 | |||
Kazakhstan | 270 | 206 | 180 | |||
Uzbekistan | 136 | 136 | 261 | |||
Our frontier markets | ||||||
Algeria | 354 | 363 | 426 | |||
Bangladesh | 222 | 183 | 233 | |||
Other and eliminations | 312 | (34 | ) | (26 | ) | |
HQ | (277 | ) | (359 | ) | (325 | ) |
Total segments | 4,215 | 3,273 | 3,587 |
Adjusted EBITDA pre-IFRS 16 | Impact of IFRS 16 | Adjusted EBITDA post-IFRS 16 | ||||
Our cornerstone | ||||||
Russia | 1,622 | 335 | 1,957 | |||
Our growth engines | ||||||
Pakistan | 622 | 47 | 669 | |||
Ukraine | 548 | 24 | 572 | |||
Kazakhstan | 253 | 17 | 270 | |||
Uzbekistan | 132 | 4 | 136 | |||
Our frontier markets | ||||||
Algeria | 320 | 34 | 354 | |||
Bangladesh | 182 | 40 | 222 | |||
Other and eliminations | 302 | 10 | 312 | |||
HQ | (277 | ) | — | (277 | ) | |
Total segments | 3,704 | 511 | 4,215 |
Year ended December 31, | ||||||||||
In millions of U.S. dollars (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 4,481 | 4,654 | 4,729 | -4 | % | -2 | % | |||
Mobile service revenue | 3,485 | 3,679 | 3,843 | -5 | % | -4 | % | |||
- of which fixed-mobile convergence (“FMC”) | 151 | 126 | 87 | 20 | % | 46 | % | |||
- of which mobile data | 972 | 996 | 1012 | -2 | % | -2 | % | |||
Fixed-line service revenue | 539 | 566 | 673 | -5 | % | -16 | % | |||
Sales of equipment, accessories and other | 457 | 410 | 213 | 12 | % | 92 | % | |||
Operating expenses | 2,523 | 2,977 | 2,941 | -15 | % | 1 | % | |||
Adjusted EBITDA | 1,957 | 1,677 | 1,788 | 17 | % | -6 | % | |||
Adjusted EBITDA margin | 43.7 | % | 36.0 | % | 37.8 | % | 7.6pp | -1.8pp | ||
Year ended December 31, | ||||||||||
In millions of RUB (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 289,875 | 291,539 | 275,887 | -1 | % | 6 | % | |||
Mobile service revenue | 225,555 | 230,123 | 224,186 | -2 | % | 3 | % | |||
- of which FMC | 9,788 | 7,942 | 5,064 | 23 | % | 57 | % | |||
- of which mobile data | 62,894 | 62,259 | 59,041 | 1 | % | 5 | % | |||
Fixed-line service revenue | 34,850 | 35,295 | 39,271 | -1 | % | -10 | % | |||
Sales of equipment, accessories and other | 29,470 | 26,121 | 12,430 | 13 | % | 110 | % | |||
Operating expenses | 163,177 | 186,822 | 171,545 | -13 | % | 9 | % | |||
Adjusted EBITDA | 126,698 | 104,717 | 104,342 | 21 | % | 0 | % | |||
Adjusted EBITDA margin | 43.7 | % | 35.9 | % | 37.8 | % | 7.8pp | -1.9pp | ||
Year ended December 31, | |||||||
2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||
Mobile | |||||||
Customers in millions | 54.6 | 55.3 | 58.2 | -1 | % | -5 | % |
Mobile data customers in millions | 35.5 | 36.8 | 38.4 | -3 | % | -4 | % |
ARPU in US$ | 5.3 | 5.4 | 5.5 | -2 | % | -2 | % |
ARPU in RUB | 340 | 336 | 319 | 1 | % | 5 | % |
Year ended December 31, | ||||||||||
In millions of U.S. dollars (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 1,321 | 1,494 | 1,525 | -12 | % | -2 | % | |||
Mobile service revenue | 1,228 | 1,391 | 1,418 | -12 | % | -2 | % | |||
- of which mobile data | 370 | 311 | 225 | 19 | % | 38 | % | |||
Sales of equipment, accessories and other | 92 | 103 | 107 | -10 | % | -4 | % | |||
Operating expenses | 652 | 780 | 822 | -17 | % | -5 | % | |||
Adjusted EBITDA | 669 | 714 | 703 | -6 | % | 2 | % | |||
Adjusted EBITDA margin | 50.7 | % | 47.8 | % | 46.1 | % | 2.9pp | 1.7pp | ||
Year ended December 31, | ||||||||||
In millions of PKR (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 197,605 | 181,722 | 160,679 | 9 | % | 13 | % | |||
Mobile service revenue | 183,760 | 169,277 | 149,393 | 9 | % | 13 | % | |||
- of which mobile data | 55,517 | 38,230 | 23,743 | 45 | % | 61 | % | |||
Sales of equipment, accessories and other | 13,844 | 12,445 | 11,286 | 11 | % | 10 | % | |||
Operating expenses | 97,531 | 94,911 | 86,583 | 3 | % | 10 | % | |||
Adjusted EBITDA | 100,074 | 86,811 | 74,096 | 15 | % | 17 | % | |||
Adjusted EBITDA margin | 50.6 | % | 47.8 | % | 46.1 | % | 2.9pp | 1.7pp | ||
Year ended December 31, | |||||||
2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||
Mobile | |||||||
Customers in millions | 60.5 | 56.2 | 53.6 | 8 | % | 5 | % |
Mobile data customers in millions | 38.8 | 33.0 | 28.5 | 18 | % | 16 | % |
ARPU in US$ | 1.7 | 2.1 | 2.2 | -17 | % | -7 | % |
ARPU in PKR | 261 | 254 | 236 | 3 | % | 8 | % |
Year ended December 31, | ||||||||||
In millions of U.S. dollars (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 775 | 813 | 915 | -5 | % | -11 | % | |||
Mobile service revenue | 769 | 801 | 898 | -4 | % | -11 | % | |||
- of which mobile data | 232 | 188 | 113 | 23 | % | 66 | % | |||
Sales of equipment, accessories and other | 5 | 12 | 17 | -54 | % | -31 | % | |||
Operating expenses | 421 | 449 | 490 | -6 | % | -8 | % | |||
Adjusted EBITDA | 354 | 363 | 426 | -3 | % | -15 | % | |||
Adjusted EBITDA margin | 45.7 | % | 44.7 | % | 46.5 | % | 1.0pp | -1.8pp | ||
Year ended December 31, | ||||||||||
In millions of DZD (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 92,513 | 94,773 | 101,457 | -2 | % | -7 | % | |||
Mobile service revenue | 91,870 | 93,409 | 99,588 | -2 | % | -6 | % | |||
- of which mobile data | 27,665 | 21,978 | 12,586 | 26 | % | 75 | % | |||
Sales of equipment, accessories and other | 643 | 1,364 | 1,869 | -53 | % | -27 | % | |||
Operating expenses | 50,241 | 52,376 | 54,301 | -4 | % | -4 | % | |||
Adjusted EBITDA | 42,272 | 42,398 | 47,156 | 0 | % | -10 | % | |||
Adjusted EBITDA margin | 45.7 | % | 44.7 | % | 46.5 | % | 1.0pp | -1.7pp | ||
Year ended December 31, | |||||||
2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||
Mobile | |||||||
Customers in millions | 14.6 | 15.8 | 15.0 | -8 | % | 6 | % |
Mobile data customers in millions | 8.8 | 9.2 | 7.2 | -5 | % | 28 | % |
ARPU in US$ | 4.2 | 4.3 | 4.8 | -3 | % | -10 | % |
ARPU in DZD | 501 | 504 | 529 | -1 | % | -5 | % |
Year ended December 31, | ||||||||||
In millions of U.S. dollars (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 537 | 521 | 574 | 3 | % | -9 | % | |||
Mobile service revenue | 525 | 504 | 557 | 4 | % | -10 | % | |||
- of which mobile data | 109 | 87 | 78 | 26 | % | 11 | % | |||
Sales of equipment, accessories and other | 11 | 17 | 17 | -35 | % | 0 | % | |||
Operating expenses | 314 | 338 | 341 | -7 | % | -1 | % | |||
Adjusted EBITDA | 222 | 183 | 233 | 21 | % | -21 | % | |||
Adjusted EBITDA margin | 41.4 | % | 35.2 | % | 40.6 | % | 6.3pp | -5.4pp | ||
Year ended December 31, | ||||||||||
In millions of BDT (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 45,284 | 43,653 | 46,471 | 4 | % | -6 | % | |||
Mobile service revenue | 44,332 | 42,211 | 45,072 | 5 | % | -6 | % | |||
- of which mobile data | 9,194 | 7,250 | 6,308 | 27 | % | 15 | % | |||
Sales of equipment, accessories and other | 952 | 1,442 | 1,399 | -34 | % | 3 | % | |||
Operating expenses | 26,522 | 28,306 | 27,630 | -6 | % | 3 | % | |||
Adjusted EBITDA | 18,762 | 15,347 | 18,841 | 22 | % | -19 | % | |||
Adjusted EBITDA margin | 41.4 | % | 35.2 | % | 40.5 | % | 6.3pp | -5.4pp | ||
Year ended December 31, | |||||||
2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||
Mobile | |||||||
Customers in millions | 33.6 | 32.3 | 31.3 | 4 | % | 3 | % |
Mobile data customers in millions | 21.5 | 19.6 | 16.9 | 10 | % | 16 | % |
ARPU in US$ | 1.3 | 1.3 | 1.5 | 1 | % | -12 | % |
ARPU in BDT | 112 | 110 | 121 | 1 | % | -9 | % |
Year ended December 31, | ||||||||||
In millions of U.S. dollars (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 870 | 688 | 622 | 26 | % | 11 | % | |||
Mobile service revenue | 812 | 641 | 577 | 27 | % | 11 | % | |||
- of which mobile data | 421 | 263 | 154 | 60 | % | 71 | % | |||
Fixed-line service revenue | 52 | 44 | 43 | 18 | % | 4 | % | |||
Sales of equipment, accessories and other | 5 | 3 | 3 | 59 | % | 25 | % | |||
Operating expenses | 298 | 301 | 276 | -1 | % | 9 | % | |||
Adjusted EBITDA | 572 | 387 | 347 | 48 | % | 12 | % | |||
Adjusted EBITDA margin | 65.7 | % | 56.3 | % | 55.7 | % | 9.5pp | 0.5pp | ||
Year ended December 31, | ||||||||||
In millions of UAH (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 22,392 | 18,719 | 16,542 | 20 | % | 13 | % | |||
Mobile service revenue | 20,903 | 17,421 | 15,338 | 20 | % | 14 | % | |||
- of which mobile data | 10,847 | 7,177 | 4,103 | 51 | % | 75 | % | |||
Fixed-line service revenue | 1,350 | 1,206 | 1,132 | 12 | % | 7 | % | |||
Sales of equipment, accessories and other | 139 | 93 | 72 | 50 | % | 28 | % | |||
Operating expenses | 7,709 | 8,190 | 7,321 | -6 | % | 12 | % | |||
Adjusted EBITDA | 14,683 | 10,529 | 9,221 | 39 | % | 14 | % | |||
Adjusted EBITDA margin | 65.6 | % | 56.2 | % | 55.7 | % | 9.3pp | 0.5pp | ||
Year ended December 31, | |||||||
2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||
Mobile | |||||||
Customers in millions | 26.2 | 26.4 | 26.5 | -1 | % | -1 | % |
Mobile data customers in millions | 16.9 | 14.8 | 12.5 | 15 | % | 18 | % |
ARPU in US$ | 2.6 | 2.0 | 1.8 | 28 | % | 11 | % |
ARPU in UAH | 66 | 54 | 48 | 21 | % | 13 | % |
Year ended December 31, | ||||||||||
In millions of U.S. dollars (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 486 | 441 | 416 | 10 | % | 6 | % | |||
Mobile service revenue | 378 | 363 | 339 | 4 | % | 7 | % | |||
- of which mobile data | 157 | 115 | 97 | 36 | % | 19 | % | |||
Fixed-line service revenue | 66 | 73 | 75 | -9 | % | -3 | % | |||
Sales of equipment, accessories and other | 41 | 4 | 1 | 859 | % | 216 | % | |||
Operating expenses | 216 | 234 | 236 | -8 | % | -1 | % | |||
Adjusted EBITDA | 270 | 206 | 180 | 31 | % | 15 | % | |||
Adjusted EBITDA margin | 55.6 | % | 46.8 | % | 43.2 | % | 8.9pp | 3.6pp | ||
Year ended December 31, | ||||||||||
In millions of KZT (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 186,039 | 151,798 | 135,613 | 23 | % | 12 | % | |||
Mobile service revenue | 144,925 | 125,125 | 110,621 | 16 | % | 13 | % | |||
- of which mobile data | 59,986 | 39,789 | 31,650 | 51 | % | 26 | % | |||
Fixed-line service revenue | 25,423 | 25,228 | 24,547 | 1 | % | 3 | % | |||
Sales of equipment, accessories and other | 15,691 | 1,446 | 446 | 985 | % | 225 | % | |||
Operating expenses | 82,586 | 80,679 | 77,067 | 2 | % | 5 | % | |||
Adjusted EBITDA | 103,454 | 71,119 | 58,546 | 46 | % | 22 | % | |||
Adjusted EBITDA margin | 55.6 | % | 46.9 | % | 43.2 | % | 8.8pp | 3.7pp | ||
Year ended December 31, | |||||||
2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||
Mobile | |||||||
Customers in millions | 10.2 | 9.9 | 9.8 | 3 | % | 2 | % |
Mobile data customers in millions | 6.9 | 6.3 | 5.7 | 10 | % | 11 | % |
ARPU in US$ | 3.1 | 3.0 | 3.0 | 2 | % | 2 | % |
ARPU in KZT | 1,192 | 1,051 | 972 | 14 | % | 8 | % |
Year ended December 31, | ||||||||||
In millions of U.S. dollars (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 258 | 315 | 513 | -18 | % | -39 | % | |||
Mobile service revenue | 255 | 312 | 509 | -18 | % | -39 | % | |||
- of which mobile data | 120 | 108 | 128 | 11 | % | -16 | % | |||
Fixed-line service revenue | 2 | 2 | 3 | -30 | % | -35 | % | |||
Sales of equipment, accessories and other | 1 | 0 | 1 | 143 | % | -22 | % | |||
Operating expenses | 122 | 178 | 252 | -32 | % | -29 | % | |||
Adjusted EBITDA | 136 | 136 | 261 | 0 | % | -48 | % | |||
Adjusted EBITDA margin | 52.8 | % | 43.3 | % | 50.9 | % | 9.5pp | -7.6pp | ||
Year ended December 31, | ||||||||||
In millions of UZS (except as indicated) | 2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||||
Total operating revenue | 2,275,256 | 2,537,768 | 2,341,828 | -10 | % | 8 | % | |||
Mobile service revenue | 2,251,950 | 2,516,756 | 2,323,177 | -11 | % | 8 | % | |||
- of which mobile data | 1,059,616 | 871,670 | 585,060 | 22 | % | 49 | % | |||
Fixed-line service revenue | 13,229 | 17,390 | 15,036 | -24 | % | 16 | % | |||
Sales of equipment, accessories and other | 10,077 | 3,622 | 3615 | 178 | % | 0 | % | |||
Operating expenses | 1,071,233 | 1,439,916 | 1,181,702 | -26 | % | 22 | % | |||
Adjusted EBITDA | 1,204,023 | 1,097,852 | 1,160,126 | 10 | % | -5 | % | |||
Adjusted EBITDA margin | 52.9 | % | 43.3 | % | 49.5 | % | 9.7pp | -6.3pp | ||
Year ended December 31, | |||||||
2019 | 2018 | 2017 | ‘18-19 % change | ‘17-18 % change | |||
Mobile | |||||||
Customers in millions | 8.1 | 9.1 | 9.7 | -11 | % | -6 | % |
Mobile data customers in millions | 5.2 | 5.5 | 5.0 | -7 | % | 10 | % |
ARPU in US$ | 2.4 | 2.8 | 4.4 | -12 | % | -38 | % |
ARPU in UZS | 21,390 | 22,177 | 20,126 | -4 | % | 10 | % |
(In millions of U.S. dollars) | 2019 | 2018 | 2017 | |||
Net cash flows from operating activities | 2,949 | 2,515 | 2,475 | |||
Net cash flows from / (used in) investing activities | (1,888 | ) | 1,997 | (3,016 | ) | |
Net cash flows from / (used in) financing activities | (1,639 | ) | (3,916 | ) | (733 | ) |
Net increase / (decrease) in cash and cash equivalents | (578 | ) | 596 | (1,274 | ) | |
Net foreign exchange difference | (9 | ) | (119 | ) | (354 | ) |
Cash and cash equivalents at beginning of period | 1,791 | 1,314 | 2,942 | |||
Cash and cash equivalents at end of period, net of overdraft | 1,204 | 1,791 | 1,314 |
Entity | Type of debt/ original lenders | Interest rate | Debt currency | Outstanding debt (mln) | Outstanding debt (US$ mln) | Maturity date | ||
VEON Holdings B.V. | Loan from SberBank | 10.0000% | RUB | 95,000 | 1,535 | 19.05.2022 | ||
VEON Holdings B.V. | Loan from Alfa Bank | 8.8000% | RUB | 17,500 | 283 | 30.08.2022 | ||
VEON Holdings B.V. | Loan from VTB | 8.7500% | RUB | 30,000 | 485 | 30.08.2022 | ||
VEON Holdings B.V. | Notes | 3.9500% | USD | 600 | 600 | 16.06.2021 | ||
VEON Holdings B.V. | Notes | 7.5043% | USD | 417 | 417 | 01.03.2022 | ||
VEON Holdings B.V. | Notes | 5.9500% | USD | 529 | 529 | 13.02.2023 | ||
VEON Holdings B.V. | Notes | 4.9500% | USD | 533 | 533 | 17.06.2024 | ||
VEON Holdings B.V. | Notes | 4.0000% | USD | 700 | 700 | 09.04.2025 | ||
VEON Holdings B.V. | Cash-pool overdrawn accounts | 1 | ||||||
TOTAL VEON Holdings B.V. | 5,083 | |||||||
GTH Finance B.V. | Notes | 6.2500% | USD | 500 | 500 | 26.04.2020 | ||
GTH Finance B.V. | Notes | 7.2500% | USD | 700 | 700 | 26.04.2023 | ||
TOTAL GTH Finance B.V. | 1,200 | |||||||
PJSC VimpelCom | Loan from VIP Finance Ireland (funded by the issuance of loan participation notes by VIP Finance Ireland) | 7.7480% | USD | 262 | 262 | 02.02.2021 | ||
PJSC VimpelCom | Other | 17 | ||||||
TOTAL PJSC VimpelCom | 279 | |||||||
PMCL | Loan from Habib Bank Limited | 6 months KIBOR + 0.90% | PKR | 1,333 | 9 | 15.12.2020 | ||
PMCL | Loan from ING Bank N.V. | 6 months LIBOR + 1.9% | USD | 75 | 75 | 15.12.2020 | ||
PMCL | Loan from MCB Bank Limited | 6 months KIBOR + 0.8% | PKR | 5,333 | 34 | 15.12.2020 | ||
PMCL | Loan from Habib Bank Limited | 6 months KIBOR + 0.35% | PKR | 8,333 | 54 | 15.06.2022 | ||
PMCL | Syndicated Loan Facility | 6 months KIBOR | PKR | 3,879 | 25 | 15.12.2023 | ||
PMCL | Syndicated Loan Facility | 6 months KIBOR | PKR | 2,413 | 16 | 15.12.2023 | ||
PMCL | Syndicated Loan Facility | 6 months KIBOR + 0.35% | PKR | 21,396 | 138 | 15.06.2022 | ||
PMCL | Syndicated Loan Facility | 6 months KIBOR + 0.75% | PKR | 15,885 | 102 | 02.09.2026 |
PMCL | Islamic Financing Facility | 6 months KIBOR + 0.75% | PKR | 2,963 | 19 | 02.09.2026 | ||
PMCL | Other | 22 | ||||||
TOTAL Pakistan Mobile Communications Limited | 494 | |||||||
Banglalink | Syndicated Loan Facility | 3 months LIBOR + 2.5% | USD | 300 | 300 | 25.04.2020 | ||
Banglalink | Syndicated Loan Facility | Average bank deposit rate + 4.25% | BDT | 8,135 | 96 | 24.12.2022 | ||
Banglalink | Syndicated Loan Facility | Average bank deposit rate + 3.0% | BDT | 1,744 | 20 | 24.12.2020 | ||
TOTAL Banglalink Digital Communications Ltd. | 416 | |||||||
Other entities | Cash-pool overdrawn accounts and other | 47 | ||||||
Total VEON consolidated | 7,519 |
2019 | 2018 | 2017 | ||||
Capital expenditures excluding licenses (refer to Note 2 of the Audited Consolidated Financial Statements) | 1,741 | 1,415 | 1,460 | |||
Adjusted for | ||||||
Additions of licenses | 50 | 526 | 332 | |||
Additions of right-of-use assets | 158 | — | — | |||
Difference in timing between accrual and payment for capital expenditures | (266 | ) | 7 | 245 | ||
Purchase of property, plant and equipment and intangible assets | 1,683 | 1,948 | 2,037 |
Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | ||||||
Bank loans and bonds | 2,100 | 3,909 | 2,009 | 794 | 8,812 | |||||
Lease liabilities | 581 | 920 | 728 | 420 | 2,649 | |||||
Purchase obligations | 677 | 19 | — | — | 696 | |||||
Total financial liabilities, net of derivative assets | 3,358 | 4,848 | 2,737 | 1,214 | 12,157 |
Name | Age | Position |
Ursula Burns | 61 | Chairman of Board of Directors |
Guillaume Bacuvier | 47 | Director |
Osama Bedier | 44 | Director |
Mikhail M. Fridman | 55 | Director |
Gennady Gazin | 55 | Director |
Andrei Gusev | 47 | Director |
Gunnar Holt | 65 | Director |
Sir Julian Horn-Smith | 71 | Director |
Robert Jan van de Kraats | 59 | Director |
Guy Laurence | 58 | Director |
Alexander Pertsovsky | 51 | Director |
Name | Age | Position |
Kaan Terzioğlu | 51 | Group Chief Executive Officer |
Sergi Herrero | 38 | Group Chief Executive Officer |
Murat Kirkgöz | 45 | Group Deputy Chief Financial Officer |
Scott Dresser | 52 | Group General Counsel |
Joshua Drew(1) | 52 | Group Chief Compliance Officer |
Alex Kazbegi | 57 | Group Chief Strategy Officer |
Yogesh Malik(2) | 47 | Group Chief Technology Officer |
Jacky Simmonds(3) | 56 | Group Chief People Officer |
Aamir Ibrahim | 51 | CEO Jazz (Pakistan) |
Oleksandr Komarov | 48 | CEO Kyivstar (Ukraine) |
Vasyl Latsanych(4) | 47 | CEO VimpelCom Russia (Beeline Brand) |
As of December 31, | |||
2019 | 2018 | 2017 | |
Russia | 28,003 | 28,570 | 22,031 |
Pakistan | 4,325 | 4,424 | 4,175 |
Algeria | 2,781 | 2,866 | 3,193 |
Bangladesh | 1,200 | 1,120 | 1,178 |
Ukraine | 3,527 | 2,754 | 2,656 |
Uzbekistan | 1,594 | 1,563 | 1,333 |
Kazakhstan(1) | 2,142 | — | — |
HQ | 286 | 507 | 640 |
Others | 2,634 | 4,328 | 4,732 |
Total | 46,492 | 46,132 | 39,938 |
As of December 31, 2019 | |||||||
Category of activity(1) | Russia | Pakistan | Algeria | Bangladesh | Ukraine | Uzbekistan | Kazakhstan |
Executive and senior management | 24 | 21 | 12 | 8 | 14 | 21 | 14 |
Engineering, construction and information technology | 1,964 | 739 | 756 | 361 | 1,218 | 410 | 942 |
Sales, marketing and other commercial operations | 17,072 | 2,476 | 1,189 | 586 | 923 | 382 | 781 |
Finance, administration and legal | 1,999 | 525 | 377 | 143 | 440 | 122 | 194 |
Customer service | 5,366 | 240 | 339 | 38 | 766 | 386 | 73 |
Procurement and logistics | 664 | 65 | 72 | 24 | 87 | 26 | 47 |
Other support functions | 914 | 259 | 36 | 40 | 79 | 247 | 91 |
Total | 28,003 | 4,325 | 2,781 | 1,200 | 3,527 | 1,594 | 2,142 |
(1) | A breakdown of employees by category of activity is not available for our HQ segment and our “Others” category. |
Name | Number of VEON Ltd. Common Shares | Percent of VEON Ltd. Issued and Outstanding Shares |
L1T VIP Holdings S.à r.l.(1) | 840,625,001 | 47.85 |
Stichting Administratiekantoor Mobile Telecommunications Investor (2) | 145,947,562 | 8.31 |
(2) | As reported on Schedule 13G, filed on April 1, 2016, by Stichting with the SEC, Stichting is the direct beneficial owner of 145,947,562 of VEON Ltd.’s common shares. LetterOne is the holder of the depositary receipts issued by Stichting and is therefore entitled to the economic benefits (dividend payments, other distributions and sale proceeds) of such depositary receipts and, indirectly, of the 145,947,562 common shares represented by the depositary receipts. According to the conditions of administration entered into between Stichting and LetterOne (“Conditions of Administration”) in connection with the transfer of 145,947,562 ADSs from LetterOne to Stichting on March 29, 2016, Stichting has the power to vote and direct the voting of, and the power to dispose and direct the disposition of, the ADSs, in its sole discretion, in accordance with the Conditions of Administration and Stichting’s articles of association. Stichting is a foundation incorporated under the laws of the Netherlands. The common shares held by Stichting represent approximately 8.31% of VEON Ltd.’s issued and outstanding shares. |
• | participate in shareholder meetings; |
• | have one vote on all issues voted upon at a shareholder meeting, except for the purposes of cumulative voting for the election of the board of directors, in which case each common share shall have the same number of votes as the total number of members to be elected to the board of directors and all such votes may be cast for a single candidate or may be distributed between or among two or more candidates; |
• | receive dividends approved by the board of directors (any dividend or other moneys payable in respect of a share which has remained unclaimed for six years from the date when it became due for payment shall, if the board of directors so resolves, be forfeited and cease to remain owing by VEON Ltd.); |
• | in the event of our liquidation, receive a pro rata share of our surplus assets; and |
• | exercise any other rights of a common shareholder set forth in our bye-laws and Bermuda law. |
• | delivering such notice to the shareholder in person; |
• | sending such notice by letter or courier to the shareholder’s address as stated in the register of shareholders; |
• | transmitting such notice by electronic means in accordance with directions given by the shareholder; or |
• | accessing such notice on our website. |
• | it is proposed by or at the direction of the board of directors; |
• | it is proposed at the direction of a court; |
• | it is proposed on the requisition in writing of such number of shareholders as is prescribed by, and is made in accordance with, the relevant provisions of the Companies Act or our bye-laws; or |
• | the chairman of the meeting in his absolute discretion decides that the resolution may properly be regarded as within the scope of the meeting. |
• | any sale of all or substantially all of our assets; |
• | the appointment of an auditor; and |
• | removal of directors. |
• | whitewash procedure for mandatory offers, which requires the affirmative vote of a majority of the shareholders voting in person or by proxy at a general meeting, excluding the vote of the shareholder or shareholders in question and their affiliates; |
• | voting for directors, which requires directors to be elected by cumulative voting at each annual general meeting; |
• | changes to our bye-laws, which require a resolution to be passed by shareholders representing not less than 75.0% of the total voting rights of the shareholders who vote in person or by proxy on the resolution; |
• | any merger, consolidation, amalgamation, conversion, reorganization, scheme of arrangement, dissolution or liquidation, which requires a resolution to be passed by shareholders representing not less than 75.0% of the total voting rights of the shareholders who vote in person or by proxy on the resolution; |
• | loans to any director, which require a resolution to be passed by shareholders representing not less than 90.0% of the total voting rights of the shareholders who vote in person or by proxy on the resolution; and |
• | the discontinuation of VEON Ltd. to a jurisdiction outside Bermuda, which requires a resolution to be passed by shareholders representing not less than 75.0% of the total voting rights of the shareholders who vote in person or by proxy on the resolution. |
• | banks and certain other financial institutions; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | insurance companies; |
• | broker-dealers; |
• | traders that elect to mark to market; |
• | tax-exempt entities; |
• | persons liable for alternative minimum tax or the Medicare contribution tax on net investment income; |
• | certain U.S. expatriates; |
• | persons holding our ADSs or common shares as part of a straddle, hedging, constructive sale, conversion or integrated transaction; |
• | persons that actually or constructively own, or are treated as owning, 10% or more of our stock by vote or value; |
• | persons that are resident or ordinarily resident in or have a permanent establishment in a jurisdiction outside the United States; |
• | persons subject to special tax accounting rules as a result of any item of gross income with respect to our ADSs or common shares being taken into account in an applicable financial statement; |
• | persons who acquired ADSs or common shares pursuant to the exercise of any employee share option or otherwise as compensation; or |
• | persons holding ADSs or common shares through partnerships or other pass-through entities. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity taxable as a corporation) created or organized in or under the laws of the United States, any state thereof or the District of Columbia; |
• | an estate whose income is subject to U.S. federal income taxation regardless of its source; or |
• | a trust that (1) is subject to the supervision of a court within the United States and the control of one or more U.S. persons or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
• | may be deemed an owner of ADSs or common shares for Dutch tax purposes pursuant to specific statutory attribution rules in Dutch tax law; |
• | is, although in principle subject to Dutch corporation tax, in whole or in part, specifically exempt from that tax in connection with income from ADSs or common shares; |
• | is an investment institution as defined in the Dutch Corporation Tax Act 1969; |
• | owns ADSs or common shares in connection with a membership of a management board or a supervisory board, an employment relationship, a deemed employment relationship or management role; |
• | has a substantial interest in VEON Ltd. or a deemed substantial interest in VEON Ltd. for Dutch tax purposes. Generally, you hold a substantial interest if (a) you - either alone or, in the case of an individual, together with your partner or any of your relatives by blood or by marriage in the direct line (including foster-children) or of those of your partner for Dutch tax purposes - own or are deemed to own, directly or indirectly, ADSs or common shares representing 5.0% or more of the shares or of any class of shares of VEON Ltd., or rights to acquire, directly or indirectly, ADSs or common shares representing such an interest in the shares of VEON Ltd. or profit participating certificates relating to 5.0% or more of the annual profits or to 5.0% or more of the liquidation proceeds of VEON Ltd., or (b) your ADSs or common shares, rights to acquire ADSs or common shares or profit participating certificates in VEON Ltd. are held by you following the application of a non-recognition provision; or |
• | is for Dutch tax purposes taxable as a corporate entity and resident of Aruba, Curacao or Saint Martin. |
• | you derive profits from an enterprise, whether as an entrepreneur or pursuant to a co-entitlement to the net value of such enterprise, other than as a shareholder, and such enterprise is carried on, in whole or in part, through a permanent establishment or a permanent representative in the Netherlands, and your ADSs or common shares are attributable to such permanent establishment or permanent representative; or |
• | you derive benefits or are deemed to derive benefits from or in connection with ADSs or common shares that are taxable as benefits from miscellaneous activities performed in the Netherlands. |
i. | you derive profits from an enterprise directly which is carried on, in whole or in part, through a permanent establishment or a permanent representative in the Netherlands, and to which permanent establishment or permanent representative your ADSs or common shares are attributable; or |
ii. | you derive profits pursuant to a co-entitlement to the net value of an enterprise which is managed in the Netherlands, other than as a holder of securities, and to which enterprise your ADSs or common shares are attributable. |
• | distributions in cash or in kind, deemed and constructive distributions and repayments of capital not recognized as paid-in for Dutch dividend withholding tax purposes; |
• | liquidation proceeds and proceeds of repurchase or redemption of ADSs or common shares in excess of the average capital recognized as paid-in for Dutch dividend withholding tax purposes; |
• | the par value of ADSs or common shares issued by VEON Ltd.to a holder of its ADSs or common shares or an increase of the par value of ADSs or common shares, as the case may be, to the extent that it does not appear that a contribution, recognized for Dutch dividend withholding tax purposes, has been made or will be made; and |
• | partial repayment of capital, recognized as paid-in for Dutch dividend withholding tax purposes, if and to the extent that there are net profits, unless (a) VEON Ltd.’s shareholders have resolved in advance to make such repayment and (b) the par value of the ADSs or common shares concerned has been reduced by an equal amount by way of an amendment to its memorandum of association. |
Aggregate nominal amount of bank loans and bonds denominated in foreign currency outstanding as of December 31, | Fair Value as of December 31, | |||||
2019 | 2020 | 2021 | 2022 | 2023 | 2019 | |
Total debt: | ||||||
Fixed Rate (in US$ millions) | 262 | 262 | — | — | — | 287 |
Average interest rate | 7.75% | 7.75% | — | — | — | |
Variable Rate (in US$ millions) | 375 | — | — | — | — | 379 |
Average interest rate | 4.31% | — | — | — | — | |
TOTAL | 637 | 262 | — | — | — | 667 |
For: | Persons depositing or withdrawing shares or ADS holders must pay to the depositary: |
Issuance of ADSs, including issuances resulting from a distribution of our shares or rights or other property | US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) |
Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates | US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) |
Any cash distribution to ADS holders | US$0.05 (or less) per ADS |
Depositary service | US$0.05 (or less) per ADS per calendar year |
Distribution of securities distributed to holders of deposited securities that are distributed to ADS holders | A fee equivalent to the fee that would be payable if securities distributed had been shares and the shares had been deposited for ADS issuance |
Transfer and registration of shares on our share register to or from the name of the depositary or its agent when a shareholder deposits or withdraws shares | Registration or transfer fees |
Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement) | Expenses of the depositary |
Converting foreign currency to U.S. dollars | Expenses of the depositary |
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or share underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes | As necessary |
Any charges incurred by the ADS depositary or its agents for servicing the deposited securities | As necessary |
Year ended December 31, | ||||
2019 | 2018 | |||
(in millions of U.S. dollars) | ||||
Audit Fees | 9.9 | 11.0 | ||
Audit-Related Fees | 1.3 | 1.1 | ||
Tax Fees | — | — | ||
All Other Fees | — | — | ||
Total | 11.2 | 12.1 |
Incorporated by Reference | ||||||
Number | Description of Exhibit | Form | File No. | Exhibit | Date | Filed Herewith |
1.1 | 20-F | 001-34694 | 1.1 | 3/14/2019 | ||
1.2 | 20-F | 001-34694 | 1.2 | 4/03/2017 | ||
2.1 | F-6 | 333-164781 | 1 | 12/22/2017 | ||
2.2 | F-4 | 333-164770 | 2.3 | 2/8/2010 | ||
2.3 | 13D | 005-85442 | 99.1 | 12/5/2013 | ||
2.4 | 6-K | 001-34694 | 4.1 | 9/26/2016 | ||
2.5 | 20-F | 001-34694 | 2.6 | 4/03/2017 | ||
2.6 | * | |||||
4.1 | 20-F | 001-34694 | 4.3 | 6/30/2011 | ||
4.2 | S-8 | 333-180368 | 4.3 | 3/27/2012 | ||
4.3 | S-8 | 333-183294 | 4.3 | 8/14/2012 | ||
4.4 | S-8 | 333-166315 | 4.3 | 4/27/2010 | ||
4.5 | S-8 | 333-166315 | 4.4 | 4/27/2010 | ||
8 | * | |||||
12.1 | * | |||||
12.2 | * | |||||
12.3 | * | |||||
13.1 | * | |||||
15.1 | * | |||||
99.1 | * | |||||
99.2 | * | |||||
101.INS | XBRL Instance Document(1) | * | ||||
101.SCH | XBRL Taxonomy Extension Schema(1) | * |
101.CAL | XBRL Taxonomy Extension Scheme Calculation Linkbase(1) | * | ||||
101.DEF | XBRL Taxonomy Extension Scheme Definition Linkbase(1) | * | ||||
101.LAB | XBRL Taxonomy Extension Scheme Label Linkbase(1) | * | ||||
101.PRE | XBRL Taxonomy Extension Scheme Presentation Linkbase(1) | * |
(1) | The following materials from the our Annual Report on Form 20-F for the year ended December 31, 2019, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated income statement for the year ended December 31, 2019, 2018 and 2017; (ii) Consolidated statement of comprehensive income for the year ended December 31, 2019, 2018 and 2017; (iii) Consolidated statement of financial position for the year ended December 31, 2019 and 2018; (iv) Consolidated statement of changes in equity for the year ended December 31, 2019, 2018 and 2017; (v) Consolidated statement of cash flows for the year ended December 31, 2019, 2018 and 2017; and (vi) Notes to consolidated financial statements. Users of this data are advised, in accordance with Rule 406T of Regulation S-T promulgated by the SEC, that this Interactive Data File is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Exchange Act, and otherwise is not subject to liability under these sections. |
Note | 2019 | 2018 | 2017 | |||||||
(In millions of U.S. dollars, except per share amounts) | ||||||||||
Service revenues | 8,240 | 8,526 | 9,105 | |||||||
Sale of equipment and accessories | 465 | 427 | 244 | |||||||
Other revenues / other income | 158 | 133 | 125 | |||||||
Total operating revenues | 3 | 8,863 | 9,086 | 9,474 | ||||||
Service costs | (1,554 | ) | (1,701 | ) | (1,879 | ) | ||||
Cost of equipment and accessories | (479 | ) | (415 | ) | (260 | ) | ||||
Selling, general and administrative expenses | 4 | (2,965 | ) | (3,697 | ) | (3,748 | ) | |||
Other operating gain / (loss) | 10 | 350 | — | — | ||||||
Depreciation | 12 | (1,652 | ) | (1,339 | ) | (1,491 | ) | |||
Amortization | 13 | (394 | ) | (495 | ) | (537 | ) | |||
Impairment (loss) / reversal | 11 | (108 | ) | (858 | ) | (66 | ) | |||
Gain / (loss) on disposal of non-current assets | (43 | ) | (57 | ) | (26 | ) | ||||
Gain / (loss) on disposal of subsidiaries | 1 | 30 | — | |||||||
Operating profit | 2,019 | 554 | 1,467 | |||||||
Finance costs | (892 | ) | (816 | ) | (935 | ) | ||||
Finance income | 53 | 67 | 95 | |||||||
Other non-operating gain / (loss) | 5 | 21 | (68 | ) | (97 | ) | ||||
Share of profit / (loss) of joint ventures and associates | — | — | (22 | ) | ||||||
Impairment of joint ventures and associates | — | — | (110 | ) | ||||||
Net foreign exchange gain / (loss) | (20 | ) | 15 | (70 | ) | |||||
Profit / (loss) before tax | 1,181 | (248 | ) | 328 | ||||||
Income tax expense | 9 | (498 | ) | (369 | ) | (472 | ) | |||
Profit / (loss) from continuing operations | 683 | (617 | ) | (144 | ) | |||||
Profit / (loss) after tax from discontinued operations | 10 | — | (300 | ) | (390 | ) | ||||
Gain / (loss) on disposal of discontinued operations | 10 | — | 1,279 | — | ||||||
Profit / (loss) for the period | 683 | 362 | (534 | ) | ||||||
Attributable to: | ||||||||||
The owners of the parent (continuing operations) | 621 | (397 | ) | (115 | ) | |||||
The owners of the parent (discontinued operations) | — | 979 | (390 | ) | ||||||
Non-controlling interest | 62 | (220 | ) | (29 | ) | |||||
683 | 362 | (534 | ) | |||||||
Basic and diluted gain / (loss) per share attributable to ordinary equity holders of the parent: | ||||||||||
From continuing operations | 19 | $0.36 | ($0.23 | ) | ($0.07 | ) | ||||
From discontinued operations | 19 | $0.00 | $0.56 | ($0.22 | ) | |||||
Total | 19 | $0.36 | $0.33 | ($0.29 | ) | |||||
Note | 2019 | 2018 * | 2017 | ||||
(In millions of U.S. dollars) | |||||||
Profit / (loss) | 683 | 362 | (534 | ) | |||
Items that may be reclassified to profit or loss | |||||||
Share of other comprehensive income / (loss) of Italy Joint Venture | — | (18 | ) | (12 | ) | ||
Foreign currency translation | 49 | (819 | ) | (637 | ) | ||
Other | 15 | 26 | (7 | ) | (7 | ) | |
Items reclassified to profit or loss | |||||||
Reclassification of accumulated foreign currency translation reserve to profit or loss | 10 | — | (79 | ) | — | ||
Reclassification of accumulated share of other comprehensive income / (loss) of Italy Joint Venture to profit or loss | 10 | — | 31 | — | |||
Other | 15 | (19 | ) | 5 | — | ||
Other comprehensive income / (loss) for the period, net of tax | 56 | (887 | ) | (656 | ) | ||
Total comprehensive income / (loss) for the period, net of tax | 739 | (525 | ) | (1,190 | ) | ||
Attributable to: | |||||||
The owners of the parent | 733 | (138 | ) | (1,081 | ) | ||
Non-controlling interests | 6 | (387 | ) | (109 | ) | ||
739 | (525 | ) | (1,190 | ) |
Note | 2019 | 2018 * | |||
(In millions of U.S. dollars) | |||||
Assets | |||||
Non-current assets | |||||
Property and equipment | 12 | 7,340 | 4,932 | ||
Intangible assets | 13 | 5,688 | 5,670 | ||
Investments and derivatives | 15 | 235 | 58 | ||
Deferred tax assets | 9 | 134 | 197 | ||
Other assets | 7 | 163 | 135 | ||
Total non-current assets | 13,560 | 10,992 | |||
Current assets | |||||
Inventories | 169 | 141 | |||
Trade and other receivables | 6 | 628 | 577 | ||
Investments and derivatives | 15 | 82 | 88 | ||
Current income tax assets | 9 | 16 | 112 | ||
Other assets | 7 | 354 | 367 | ||
Assets held for sale | — | 17 | |||
Cash and cash equivalents | 16 | 1,250 | 1,808 | ||
Total current assets | 2,499 | 3,110 | |||
Total assets | 16,059 | 14,102 | |||
Equity and liabilities | |||||
Equity | |||||
Equity attributable to equity owners of the parent | 18 | 1,226 | 3,670 | ||
Non-controlling interests | 994 | (891 | ) | ||
Total equity | 2,220 | 2,779 | |||
Non-current liabilities | |||||
Debt and derivatives | 15 | 7,759 | 6,567 | ||
Provisions | 8 | 138 | 110 | ||
Deferred tax liabilities | 9 | 141 | 180 | ||
Other liabilities | 7 | 33 | 53 | ||
Total non-current liabilities | 8,071 | 6,910 | |||
Current liabilities | |||||
Trade and other payables | 1,847 | 1,624 | |||
Debt and derivatives | 15 | 2,585 | 1,289 | ||
Provisions | 8 | 222 | 234 | ||
Current income tax payables | 9 | 102 | 196 | ||
Other liabilities | 7 | 1,012 | 1,066 | ||
Liabilities held for sale | — | 4 | |||
Total current liabilities | 5,768 | 4,413 | |||
Total equity and liabilities | 16,059 | 14,102 |
Attributable to equity owners of the parent | |||||||||||||||||||
(In millions of U.S. dollars) | Note | Number of shares outstanding | Issued capital | Capital Surplus | Other capital reserves | Accumulated deficit * | Foreign currency translation | Total | Non-controlling interests | Total equity | |||||||||
As of December 31, 2018 | 1,749,127,404 | 2 | 12,753 | 743 | (1,412 | ) | (8,416 | ) | 3,670 | (891 | ) | 2,779 | |||||||
Adjustments due to new accounting standards | 24 | — | — | — | — | (3 | ) | — | (3 | ) | (1 | ) | (4 | ) | |||||
As of January 1, 2019 | 1,749,127,404 | 2 | 12,753 | 743 | (1,415 | ) | (8,416 | ) | 3,667 | (892 | ) | 2,775 | |||||||
Profit / (loss) for the period | — | — | — | — | 621 | — | 621 | 62 | 683 | ||||||||||
Other comprehensive income / (loss) | — | — | — | 6 | 1 | 105 | 112 | (56 | ) | 56 | |||||||||
Total comprehensive income / (loss) | — | — | — | 6 | 622 | 105 | 733 | 6 | 739 | ||||||||||
Dividends declared | 20 | — | — | — | — | (525 | ) | — | (525 | ) | (108 | ) | (633 | ) | |||||
Changes in ownership interest in a subsidiary that do not result in a loss of control | 10 | — | — | — | (2,594 | ) | — | — | (2,594 | ) | 1,986 | (608 | ) | ||||||
Other | — | — | — | (42 | ) | (12 | ) | (1 | ) | (55 | ) | 2 | (53 | ) | |||||
As of December 31, 2019 | 1,749,127,404 | 2 | 12,753 | (1,887 | ) | (1,330 | ) | (8,312 | ) | 1,226 | 994 | 2,220 |
Attributable to equity owners of the parent | |||||||||||||||||||
(In millions of U.S. dollars) | Note | Number of shares outstanding | Issued capital | Capital Surplus | Other capital reserves | Accumulated deficit * | Foreign currency translation | Total | Non-controlling interests | Total equity | |||||||||
As of December 31, 2017 | 1,749,127,404 | 2 | 12,753 | 729 | (1,486 | ) | (7,667 | ) | 4,331 | (441 | ) | 3,890 | |||||||
Adjustments due to new accounting standards | — | — | — | — | 46 | — | 46 | 11 | 57 | ||||||||||
As of January 1, 2018 | 1,749,127,404 | 2 | 12,753 | 729 | (1,440 | ) | (7,667 | ) | 4,377 | (430 | ) | 3,947 | |||||||
Profit / (loss) for the period | — | — | — | — | 582 | — | 582 | (220 | ) | 362 | |||||||||
Other comprehensive income / (loss) | — | — | — | 11 | 5 | (736 | ) | (720 | ) | (167 | ) | (887 | ) | ||||||
Total comprehensive income / (loss) | — | — | — | 11 | 587 | (736 | ) | (138 | ) | (387 | ) | (525 | ) | ||||||
Dividends declared | 20 | — | — | — | — | (509 | ) | — | (509 | ) | (93 | ) | (602 | ) | |||||
Other | — | — | — | 3 | (50 | ) | (13 | ) | (60 | ) | 19 | (41 | ) | ||||||
As of December 31, 2018 | 1,749,127,404 | 2 | 12,753 | 743 | (1,412 | ) | (8,416 | ) | 3,670 | (891 | ) | 2,779 |
Attributable to equity owners of the parent | |||||||||||||||||||
(In millions of U.S. dollars, except for share amounts) | Note | Number of shares outstanding | Issued capital | Capital Surplus | Other capital reserves | Accumulated deficit * | Foreign currency translation | Total | Non-controlling interests | Total equity | |||||||||
As of January 1, 2017 | 1,749,004,648 | 2 | 12,753 | 753 | (439 | ) | (7,109 | ) | 5,960 | 83 | 6,043 | ||||||||
Profit / (loss) for the period | — | — | — | — | (505 | ) | — | (505 | ) | (29 | ) | (534 | ) | ||||||
Other comprehensive income | — | — | — | (18 | ) | — | (558 | ) | (576 | ) | (80 | ) | (656 | ) | |||||
Total comprehensive income | — | — | — | (18 | ) | (505 | ) | (558 | ) | (1,081 | ) | (109 | ) | (1,190 | ) | ||||
Dividends declared | 20 | — | — | — | — | (536 | ) | — | (536 | ) | (168 | ) | (704 | ) | |||||
Share-based payment transactions | 122,756 | — | — | — | — | — | — | — | — | ||||||||||
Changes in ownership interest in a subsidiary that do not result in a loss of control | — | — | — | (12 | ) | — | — | (12 | ) | (247 | ) | (259 | ) | ||||||
Reallocation to legal reserve in Algeria | — | — | — | 6 | (6 | ) | — | — | — | — | |||||||||
As of December 31, 2017 | 1,749,127,404 | 2 | 12,753 | 729 | (1,486 | ) | (7,667 | ) | 4,331 | (441 | ) | 3,890 |
(In millions of U.S. dollars) | Note | 2019 | 2018 | 2017 | |||
Operating activities | |||||||
Profit / (loss) before tax from continuing operations | 1,181 | (248 | ) | 328 | |||
Non-cash adjustments to reconcile profit before tax to net cash flows | |||||||
Depreciation, amortization and impairment loss / (reversal) | 2,154 | 2,692 | 2,094 | ||||
(Gain) / loss on disposal of non-current assets | 43 | 57 | 26 | ||||
(Gain) / loss on disposal of subsidiaries | (1 | ) | (30 | ) | — | ||
Finance costs | 892 | 816 | 935 | ||||
Finance income | (53 | ) | (67 | ) | (95 | ) | |
Other non-operating (gain) / loss | (21 | ) | 68 | 97 | |||
Share of loss and impairment of joint ventures and associates | — | — | 132 | ||||
Net foreign exchange (gain) / loss | 20 | (15 | ) | 70 | |||
Changes in trade and other receivables and prepayments | (224 | ) | 96 | (168 | ) | ||
Changes in inventories | (28 | ) | (88 | ) | 54 | ||
Changes in trade and other payables | 52 | 274 | 311 | ||||
Changes in provisions, pensions and other | 106 | 40 | (119 | ) | |||
Interest paid | 15 | (714 | ) | (736 | ) | (834 | ) |
Interest received | 58 | 60 | 89 | ||||
Income tax paid | (516 | ) | (404 | ) | (445 | ) | |
Net cash flows from operating activities | 2,949 | 2,515 | 2,475 | ||||
Investing activities | |||||||
Purchase of property, plant and equipment and intangible assets | (1,683 | ) | (1,948 | ) | (2,037 | ) | |
Payments on deposits | (922 | ) | (32 | ) | (1,165 | ) | |
Receipts from deposits | 698 | 1,066 | 267 | ||||
Proceeds from sale of Italy Joint Venture | — | 2,830 | — | ||||
Receipts from / (investment in) financial assets | (9 | ) | 62 | (101 | ) | ||
Other proceeds from investing activities, net | 28 | 19 | 20 | ||||
Net cash flows from / (used in) investing activities | (1,888 | ) | 1,997 | (3,016 | ) | ||
Financing activities | |||||||
Proceeds from borrowings, net of fees paid * | 15 | 2,610 | 807 | 6,193 | |||
Repayment of debt | 15 | (2,978 | ) | (4,122 | ) | (5,948 | ) |
Acquisition of non-controlling interest | 10 | (613 | ) | — | (259 | ) | |
Dividends paid to owners of the parent | 20 | (520 | ) | (508 | ) | (518 | ) |
Dividends paid to non-controlling interests | 20 | (138 | ) | (93 | ) | (201 | ) |
Net cash flows from / (used in) financing activities | (1,639 | ) | (3,916 | ) | (733 | ) | |
Net increase / (decrease) in cash and cash equivalents | (578 | ) | 596 | (1,274 | ) | ||
Net foreign exchange difference | (9 | ) | (119 | ) | (354 | ) | |
Cash and cash equivalents at beginning of period | 1,791 | 1,314 | 2,942 | ||||
Cash and cash equivalents at end of period, net of overdraft | 16 | 1,204 | 1,791 | 1,314 |
2 | SEGMENT INFORMATION |
Total revenue | Adjusted EBITDA | CAPEX excl licenses and ROU | ||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||
Our cornerstone | ||||||||||||||||||
Russia | 4,481 | 4,654 | 4,729 | 1,957 | 1,677 | 1,788 | 976 | 742 | 667 | |||||||||
Our growth engines | ||||||||||||||||||
Pakistan | 1,321 | 1,494 | 1,525 | 669 | 714 | 703 | 213 | 199 | 240 | |||||||||
Ukraine | 870 | 688 | 622 | 572 | 387 | 347 | 156 | 115 | 98 | |||||||||
Kazakhstan | 486 | 441 | 416 | 270 | 206 | 180 | 108 | 66 | 75 | |||||||||
Uzbekistan | 258 | 315 | 513 | 136 | 136 | 261 | 53 | 39 | 63 | |||||||||
Our frontier markets | ||||||||||||||||||
Algeria | 775 | 813 | 915 | 354 | 363 | 426 | 108 | 107 | 132 | |||||||||
Bangladesh | 537 | 521 | 574 | 222 | 183 | 233 | 82 | 93 | 101 | |||||||||
Other and eliminations | 135 | 160 | 180 | 312 | (34 | ) | (26 | ) | 38 | 43 | 53 | |||||||
HQ | — | — | — | (277 | ) | (359 | ) | (325 | ) | 7 | 11 | 31 | ||||||
Total segments | 8,863 | 9,086 | 9,474 | 4,215 | 3,273 | 3,587 | 1,741 | 1,415 | 1,460 |
2019 | 2018 | 2017 | ||||
Total Segments Adjusted EBITDA | 4,215 | 3,273 | 3,587 | |||
Depreciation | (1,652 | ) | (1,339 | ) | (1,491 | ) |
Amortization | (394 | ) | (495 | ) | (537 | ) |
Impairment (loss) / reversal | (108 | ) | (858 | ) | (66 | ) |
Gain / (loss) on disposal of non-current assets | (43 | ) | (57 | ) | (26 | ) |
Gain / (loss) on sale of subsidiaries | 1 | 30 | — | |||
Finance costs | (892 | ) | (816 | ) | (935 | ) |
Finance income | 53 | 67 | 95 | |||
Other non-operating gain / (loss), net | 21 | (68 | ) | (97 | ) | |
Share of loss of joint ventures and associates | — | — | (22 | ) | ||
Impairment of joint ventures and associates | — | — | (110 | ) | ||
Net foreign exchange gain / (loss) | (20 | ) | 15 | (70 | ) | |
Profit / (loss) before tax from continuing operations | 1,181 | (248 | ) | 328 |
2019 | 2018 | |||
Our cornerstone | ||||
Russia | 6,797 | 4,794 | ||
Our growth engines | ||||
Pakistan | 1,662 | 1,661 | ||
Ukraine | 1,022 | 748 | ||
Kazakhstan | 554 | 458 | ||
Uzbekistan | 217 | 212 | ||
Our frontier markets | ||||
Algeria | 1,926 | 1,890 | ||
Bangladesh | 855 | 773 | ||
Other and eliminations | 499 | 438 | ||
HQ | 28 | 18 | ||
Total segments | 13,560 | 10,992 |
3 | OPERATING REVENUE |
Mobile | Fixed | Total revenue | ||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||
Our cornerstone | ||||||||||||||||||
Russia | 3,938 | 4,085 | 4,053 | 543 | 569 | 676 | 4,481 | 4,654 | 4,729 | |||||||||
Our growth engines | ||||||||||||||||||
Pakistan | 1,321 | 1,494 | 1,525 | — | — | — | 1,321 | 1,494 | 1,525 | |||||||||
Ukraine * | 818 | 644 | 581 | 52 | 44 | 41 | 870 | 688 | 622 | |||||||||
Kazakhstan | 419 | 368 | 341 | 67 | 73 | 75 | 486 | 441 | 416 | |||||||||
Uzbekistan | 256 | 313 | 510 | 2 | 2 | 3 | 258 | 315 | 513 | |||||||||
Our frontier markets | ||||||||||||||||||
Algeria | 775 | 813 | 915 | — | — | — | 775 | 813 | 915 | |||||||||
Bangladesh | 537 | 521 | 574 | — | — | — | 537 | 521 | 574 | |||||||||
Other and eliminations | 76 | 128 | 189 | 59 | 32 | (9 | ) | 135 | 160 | 180 | ||||||||
HQ | — | — | — | — | — | — | — | — | — | |||||||||
Total segments | 8,140 | 8,366 | 8,688 | 723 | 720 | 786 | 8,863 | 9,086 | 9,474 |
December 31, 2019 | December 31, 2018 | ||||
Contract balances | |||||
Receivables (billed) | 748 | 672 | |||
Contract assets (unbilled) | 38 | 44 | |||
Contract liabilities | (243 | ) | (361 | ) | |
Capitalized costs | |||||
Customer acquisition costs | 101 | 83 | |||
4 | SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
2019 | 2018 | 2017 | |||||
Network and IT costs | 791 | 1,176 | 1,185 | ||||
Personnel costs | 875 | 889 | 927 | ||||
Customer associated costs | 720 | 867 | 893 | ||||
Losses on receivables | 66 | 62 | 59 | ||||
Taxes, other than income taxes | 158 | 217 | 219 | ||||
Other | 355 | 486 | 465 | ||||
Total selling, general and administrative expenses | 2,965 | 3,697 | 3,748 |
5 | OTHER NON-OPERATING GAIN / (LOSS) |
2019 | 2018 | 2017 | |||||
Loss from early debt redemption | — | (30 | ) | (124 | ) | ||
Change of fair value of other derivatives | (17 | ) | (58 | ) | (13 | ) | |
Other gains / (losses) | 38 | 20 | 40 | ||||
Other non-operating gain / (loss), net | 21 | (68 | ) | (97 | ) |
6 | TRADE AND OTHER RECEIVABLES |
2019 | 2018 | 2017 | |||||
Trade receivables (gross)* | 786 | 716 | 798 | ||||
Expected credit losses | (176 | ) | (171 | ) | (169 | ) | |
Trade receivables (net) | 610 | 545 | 629 | ||||
Other receivable, net of expected credit losses allowance | 18 | 32 | 126 | ||||
Total trade and other receivables | 628 | 577 | 755 |
2019 | 2018 | 2017 | |||||
Balance as of January 1 | 171 | 169 | 160 | ||||
Adjustment due to new accounting standards | — | 14 | — | ||||
Accruals for expected credit losses | 66 | 47 | 36 | ||||
Recoveries | (8 | ) | (17 | ) | (9 | ) | |
Accounts receivable written off | (31 | ) | (18 | ) | (13 | ) | |
Reclassification | (24 | ) | — | — | |||
Foreign currency translation adjustment | 2 | (15 | ) | (4 | ) | ||
Other movements | — | (9 | ) | (1 | ) | ||
Balance as of December 31 | 176 | 171 | 169 |
Days past due | ||||||||||||
December 31, 2019 | Contract assets | Current | < 30 days | Between 31 and 120 days | > 120 days | Total | ||||||
Expected loss rate, % | 1.1 | % | 1.6 | % | 4.9 | % | 36.5 | % | 86.9 | % | ||
Trade receivables | 38 | 446 | 82 | 52 | 168 | 786 | ||||||
Expected credit losses | — | (7 | ) | (4 | ) | (19 | ) | (146 | ) | (176 | ) | |
Trade receivables, net | 38 | 439 | 78 | 33 | 22 | 610 |
Days past due | ||||||||||||
December 31, 2018 | Contract assets | Current | < 30 days | Between 31 and 120 days | > 120 days | Total | ||||||
Expected loss rate, % | 0.2 | % | 1.2 | % | 9.6 | % | 33.6 | % | 81.5 | % | ||
Trade receivables | 44 | 389 | 61 | 44 | 178 | 716 | ||||||
Expected credit losses | (1 | ) | (5 | ) | (6 | ) | (15 | ) | (144 | ) | (171 | ) |
Trade receivables, net | 43 | 384 | 55 | 29 | 34 | 545 |
7 | OTHER ASSETS AND LIABILITIES |
2019 | 2018 * | ||||
Other non-current assets | |||||
Customer acquisition costs (see Note 3) | 101 | 83 | |||
Tax advances (non-income tax) | 30 | 32 | |||
Other non-financial assets | 32 | 20 | |||
Total other non-current assets | 163 | 135 | |||
Other current assets | |||||
Advances to suppliers | 111 | 151 | |||
Input value added tax | 158 | 149 | |||
Prepaid taxes | 45 | 39 | |||
Other assets | 40 | 28 | |||
Total other current assets | 354 | 367 |
2019 | 2018 * | ||||
Other non-current liabilities | |||||
Long-term deferred revenue (see Note 3) | 18 | 10 | |||
Other liabilities | 15 | 43 | |||
Total other non-current liabilities | 33 | 53 | |||
Other current liabilities | |||||
Taxes payable (non-income taxes) | 411 | 352 | |||
Short-term deferred revenue (see Note 3) | 161 | 151 | |||
Customer advances (see Note 3) | 64 | 200 | |||
Other payments to authorities | 97 | 86 | |||
Due to employees | 197 | 198 | |||
Other liabilities | 82 | 79 | |||
Total other current liabilities | 1,012 | 1,066 |
8 | PROVISIONS AND CONTINGENT LIABILITIES |
Non-income tax provisions | Decom-missioning provision | Legal provision | Other provisions | Total * | ||||||
As of January 1, 2018 | 98 | 106 | 49 | 34 | 287 | |||||
Arising during the year | 11 | 4 | 5 | 43 | 63 | |||||
Reclassified to assets held for sale | (1 | ) | (4 | ) | — | — | (5 | ) | ||
Utilized | (11 | ) | (1 | ) | (2 | ) | (15 | ) | (29 | ) |
Unused amounts reversed | — | (2 | ) | (8 | ) | — | (10 | ) | ||
Transfer and reclassification | 65 | — | — | — | 65 | |||||
Discount rate adjustment and imputed interest (change in estimate) | — | 8 | — | — | 8 | |||||
Translation adjustments and other | (12 | ) | (18 | ) | — | (5 | ) | (35 | ) | |
As of December 31, 2018 | 150 | 93 | 44 | 57 | 344 | |||||
Non-current | — | 93 | 17 | — | 110 | |||||
Current | 150 | — | 27 | 57 | 234 | |||||
As of January 1, 2019 | 150 | 93 | 44 | 57 | 344 | |||||
Arising during the year | 79 | 28 | 3 | 70 | 180 | |||||
Utilized | (105 | ) | (1 | ) | (6 | ) | (51 | ) | (163 | ) |
Unused amounts reversed | (4 | ) | — | (15 | ) | — | (19 | ) | ||
Transfer and reclassification | 5 | 5 | (1 | ) | (2 | ) | 7 | |||
Discount rate adjustment and imputed interest (change in estimate) | — | 8 | — | — | 8 | |||||
Translation adjustments and other | 1 | 5 | 1 | (4 | ) | 3 | ||||
As of December 31, 2019 | 126 | 138 | 26 | 70 | 360 | |||||
Non-current | — | 138 | — | — | 138 | |||||
Current | 126 | — | 26 | 70 | 222 |
9 | INCOME TAXES |
2019 | 2018 | ||||
Current tax payable | 36 | 32 | |||
Uncertain tax provisions | 66 | 164 | |||
Total income tax payable | 102 | 196 |
2019 | 2018 | 2017 | |||||
Current income taxes | |||||||
Current year | 495 | 477 | 397 | ||||
Adjustments in respect of previous years | 5 | 9 | (28 | ) | |||
Total current income taxes | 500 | 486 | 369 | ||||
Deferred income taxes | |||||||
Movement of temporary differences and losses * | (36 | ) | (152 | ) | (13 | ) | |
Changes in tax rates | (1 | ) | 6 | 10 | |||
Changes in recognized deferred tax assets | 39 | — | 20 | ||||
Adjustments in respect of previous years | 3 | 28 | 86 | ||||
Other | (7 | ) | 1 | — | |||
Total deferred tax expense | (2 | ) | (117 | ) | 103 | ||
Income tax expense | 498 | 369 | 472 |
2019 | 2018 | 2017 | |||||
Profit / (loss) before tax from continuing operations | 1,181 | (248 | ) | 328 | |||
Income tax benefit / (expense) at statutory tax rate (25.0%) | (295 | ) | 62 | (82 | ) | ||
Difference due to the effects of: | |||||||
Different tax rates in different jurisdictions | 20 | 89 | 84 | ||||
Non-deductible expenses | (90 | ) | (120 | ) | (117 | ) | |
Non-taxable income | 5 | 49 | 35 | ||||
Adjustments in respect of previous years | (49 | ) | (39 | ) | (52 | ) | |
Movements in recognized deferred tax assets | (13 | ) | (354 | ) | (166 | ) | |
Withholding taxes | (50 | ) | 45 | (123 | ) | ||
Uncertain tax positions | 6 | (17 | ) | (24 | ) | ||
Change in income tax rate | 1 | (6 | ) | (10 | ) | ||
Other | (33 | ) | (78 | ) | (17 | ) | |
Income tax benefit / (expense) | (498 | ) | (369 | ) | (472 | ) | |
Effective tax rate | 42.2 | % | -148.8 | % | 143.9 | % | |
Reason | Explanation |
Different tax rates in different jurisdictions | Certain jurisdictions in which VEON operates have income tax rates which are different to the Dutch statutory tax rate of 25%. Profitability in countries with higher tax rates (including Pakistan, Algeria and Bangladesh) has a negative impact on the effective tax rate. |
Non-deductible expenses | The Group incurs certain expenses which are non-deductible in the relevant jurisdiction. In 2019, as in previous years, such expenses include impairment losses (unless resulting in a change in temporary differences), certain non-income tax charges(i.e. minimum tax regimes) and some intra-group expenses (i.e. interest on internal loans). |
Non-taxable income | The Group earns non-taxable income primarily in its holding companies, primarily relating to intra-group interest income and certain other income which is non-taxable in the relevant jurisdiction. |
Adjustments in respect of previous years | The effect of prior year adjustments mainly relates to updated tax positions. |
Movements in recognized deferred tax assets | Movements in recognized deferred tax assets are primarily caused by tax losses and other credits for which no deferred tax asset has been recognized. This primarily occurs in holding entities in the Netherlands (2019: $42, 2018: $147, 2017: $112) and in GTH (2019: $43, 2018: $213, 2017: $49). |
Withholding taxes | Withholding taxes are recognized to the extent that dividends from foreign operations are expected to be paid in the foreseeable future. In 2019, similar to previous years, expenses relating to withholding taxes were primarily influenced by dividends expected from Russia, Algeria and Pakistan. |
Uncertain tax positions | The tax legislation in the markets in which VEON operates is unpredictable and gives rise to significant uncertainties (see ‘Sources of estimation uncertainty’ below). Movements in uncertain tax positions stem from such uncertainties. |
Change in income tax rate | Changes in tax rates impact the valuation of existing temporary differences. The nominal tax rates decreased in Pakistan in 2019, 2018 and 2017, and in Uzbekistan in 2018. |
Other | In 2019, the Group recorded an increase in income tax liabilities of US$29 as a result of the settlement with the Egyptian Tax Authority for outstanding tax liabilities for GTH. Refer to Note 8 for further details. In previous years, other tax expense primarily related to the recording of alternative minimum and local taxes in Pakistan. |
2019 | 2018 | ||||
Deferred tax assets | 134 | 197 | |||
Deferred tax liability | (141 | ) | (180 | ) | |
Net deferred tax position | (7 | ) | 17 |
Movements in deferred taxes | ||||||||
Opening balance | Net income statement movement | Other movements | Closing balance | |||||
Property and equipment | (275 | ) | 5 | (18 | ) | (288 | ) | |
Intangible assets | (60 | ) | 22 | — | (38 | ) | ||
Trade receivables | 32 | 16 | (1 | ) | 47 | |||
Provisions | 30 | 2 | (1 | ) | 31 | |||
Accounts payable | 113 | 11 | 32 | 156 | ||||
Withholding tax on undistributed earnings | (50 | ) | (2 | ) | — | (52 | ) | |
Tax losses and other balances carried forwards | 2,173 | (68 | ) | (79 | ) | 2,026 | ||
Non-recognized deferred tax assets | (1,955 | ) | — | 61 | (1,894 | ) | ||
Other | 9 | 12 | (16 | ) | 5 | |||
Net deferred tax positions | 17 | (2 | ) | (22 | ) | (7 | ) |
Movements in deferred taxes | ||||||||
Opening balance | Net income statement movement | Other movements | Closing balance | |||||
Property and equipment | (443 | ) | 126 | 42 | (275 | ) | ||
Intangible assets | (165 | ) | 94 | 11 | (60 | ) | ||
Trade receivables | 36 | (6 | ) | 2 | 32 | |||
Provisions | 33 | 2 | (5 | ) | 30 | |||
Accounts payable | 133 | 7 | (27 | ) | 113 | |||
Withholding tax on undistributed earnings | (116 | ) | 70 | (4 | ) | (50 | ) | |
Tax losses and other balances carried forwards | 2,434 | (191 | ) | (70 | ) | 2,173 | ||
Non-recognized deferred tax assets | (1,980 | ) | — | 25 | (1,955 | ) | ||
Other | 28 | 15 | (34 | ) | 9 | |||
Net deferred tax positions | (40 | ) | 117 | (60 | ) | 17 |
As of December 31, 2019 | 0-5 years | 6-10 years | More than 10 years | Indefinite | Total | |||||
Tax losses expiry | ||||||||||
Recognized losses | — | — | — | (280 | ) | (280 | ) | |||
Recognized DTA | — | — | — | 73 | 73 | |||||
Non-recognized losses | (1,292 | ) | (1,645 | ) | — | (6,486 | ) | (9,423 | ) | |
Non-recognized DTA | 279 | 357 | — | 1,258 | 1,894 | |||||
Other credits carried forwards expiry | ||||||||||
Recognized credits | (13 | ) | (46 | ) | — | — | (59 | ) | ||
Recognized DTA | 13 | 46 | — | — | 59 | |||||
Non-recognized credits | — | — | — | (143 | ) | (143 | ) | |||
Non-recognized DTA | — | — | — | 31 | 31 | |||||
As of December 31, 2018 | 0-5 years | 6-10 years | More than 10 years | Indefinite | Total | |||||
Tax losses expiry | ||||||||||
Recognized losses | (83 | ) | — | — | (425 | ) | (508 | ) | ||
Recognized DTA | 17 | — | — | 146 | 163 | |||||
Non-recognized losses | (968 | ) | (2,421 | ) | — | (6,346 | ) | (9,735 | ) | |
Non-recognized DTA | 198 | 497 | — | 1,260 | 1,955 | |||||
Other credits carried forwards expiry | ||||||||||
Recognized credits | (30 | ) | (25 | ) | — | — | (55 | ) | ||
Recognized DTA | 30 | 25 | — | — | 55 | |||||
Non-recognized credits | — | — | — | — | — | |||||
Non-recognized DTA | — | — | — | — | — | |||||
10 | SIGNIFICANT TRANSACTIONS |
2018 | |||
Cash consideration received | 2,830 | ||
Derecognition of assets classified as held for sale | (1,599 | ) | |
Release cumulative share of other comprehensive income / (loss) of Italy Joint Venture | (31 | ) | |
Release cumulative foreign currency translation reserve related to Italy Joint Venture * | 79 | ||
Gain / (loss) on disposal of discontinued operations | 1,279 |
11 | IMPAIRMENT OF ASSETS |
Property and equipment | Intangible assets | Goodwill | Total impairment | ||||||
2018 | |||||||||
Algeria | — | — | 125 | 125 | |||||
Armenia | 46 | 10 | 25 | 81 | |||||
Bangladesh | 221 | 230 | — | 451 | |||||
Georgia | 31 | 19 | — | 50 | |||||
Kyrgyzstan | — | — | 74 | 74 | |||||
Other | 37 | 40 | — | 77 | |||||
335 | 299 | 224 | 858 | ||||||
2017 | |||||||||
Armenia | — | — | 34 | 34 | |||||
Kyrgyzstan | — | — | 17 | 17 | |||||
Other | 15 | — | — | 15 | |||||
15 | — | 51 | 66 |
Discount rate (local currency) | Average annual revenue growth rate during forecast period | Terminal growth rate | ||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||
Russia | 9.1 | % | 10.3 | % | 10.6 | % | 1.4 | % | 1.1 | % | 1.9 | % | 1.6 | % | 1.3 | % | 1.0 | % |
Ukraine | 14.6 | % | 16.3 | % | 17.1 | % | 5.6 | % | 4.4 | % | 3.9 | % | 3.2 | % | 4.0 | % | 2.0 | % |
Algeria | 10.4 | % | 11.1 | % | 10.7 | % | 1.0 | % | 0.7 | % | 1.0 | % | 1.0 | % | 0.9 | % | 3.0 | % |
Pakistan | 14.5 | % | 14.4 | % | 15.0 | % | 3.9 | % | 3.5 | % | 5.0 | % | 2.7 | % | 4.0 | % | 4.0 | % |
Bangladesh | 11.4 | % | 12.2 | % | 12.7 | % | 3.2 | % | 0.6 | % | 5.0 | % | 3.3 | % | 4.0 | % | 4.6 | % |
Kazakhstan | 9.2 | % | 8.4 | % | 10.8 | % | 5.3 | % | 2.8 | % | 3.2 | % | 3.3 | % | 1.1 | % | 2.4 | % |
Kyrgyzstan | 14.1 | % | 14.8 | % | 15.5 | % | 1.6 | % | 2.8 | % | (1.5 | )% | 5.0 | % | 5.0 | % | 3.5 | % |
Uzbekistan | 14.5 | % | 13.1 | % | 15.3 | % | 4.1 | % | 5.5 | % | 6.9 | % | 6.0 | % | 6.3 | % | 6.5 | % |
Armenia | 11.4 | % | 12.5 | % | 13.0 | % | (1.0 | )% | 0.2 | % | (1.0 | )% | 3.0 | % | 0.8 | % | 3.0 | % |
Georgia | 9.6 | % | 10.6 | % | 11.0 | % | 3.6 | % | 2.1 | % | 5.6 | % | 3.0 | % | 3.0 | % | 1.0 | % |
Average operating margin | Average CAPEX excl licenses and ROU as a percentage of revenue | |||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||
Russia | 34.7 | % | 34.6 | % | 36.4 | % | 19.9 | % | 19.8 | % | 15.7 | % |
Ukraine | 59.9 | % | 54.0 | % | 49.9 | % | 18.8 | % | 16.3 | % | 15.6 | % |
Algeria | 42.6 | % | 44.0 | % | 46.2 | % | 12.5 | % | 15.1 | % | 14.8 | % |
Pakistan | 47.3 | % | 47.9 | % | 43.6 | % | 17.2 | % | 16.7 | % | 15.3 | % |
Bangladesh | 36.0 | % | 35.4 | % | 38.7 | % | 15.4 | % | 14.9 | % | 14.3 | % |
Kazakhstan | 49.9 | % | 46.5 | % | 44.5 | % | 20.0 | % | 17.7 | % | 17.9 | % |
Kyrgyzstan | 31.4 | % | 39.9 | % | 42.0 | % | 26.9 | % | 17.2 | % | 16.4 | % |
Uzbekistan | 51.4 | % | 43.9 | % | 42.9 | % | 19.4 | % | 16.2 | % | 14.1 | % |
Armenia | 23.9 | % | 23.6 | % | 29.7 | % | 23.0 | % | 21.0 | % | 19.6 | % |
Georgia | 28.9 | % | 24.5 | % | 25.2 | % | 22.0 | % | 23.8 | % | 23.3 | % |
Assumption | Description |
Discount rate | Discount rates are initially determined in US dollars based on the risk-free rate for 20-year maturity bonds of the United States Treasury, adjusted for a risk premium to reflect both the increased risk of investing in equities and the systematic risk of the specific CGU relative to the market as a whole. The equity market risk premium used was 5.6% (2018: 5.4%, 2017: 6.0%). The systematic risk, beta, represents the median of the raw betas of the entities comparable in size and geographic footprint with the ones of the Company (“Peer Group”). The debt risk premium is based on the median of Standard & Poor’s long-term credit rating of the Peer Group. The weighted average cost of capital is determined based on target debt-to-equity ratios representing the median historical five-year capital structure for each entity from the Peer Group. The discount rate in functional currency of a CGU is adjusted for the long-term inflation forecast of the respective country in which the business operates, as well as applicable country risk premium. |
Projected revenue growth rates | The revenue growth rates vary based on numerous factors, including size of market, GDP (Gross Domestic Product), foreign currency projections, traffic growth, market share and others. |
Projected average operating margin | The Company estimates operating margin based on pre-IFRS 16 Adjusted EBITDA divided by Total Operating Revenue for each CGU and each future year. The forecasted operating margin is based on the budget of the following year and assumes cost optimization initiatives which are part of on-going operations, as well as regulatory and technological changes known to date, such as telecommunication license issues and price regulation among others. |
Average CAPEX excl licenses and ROU as a percentage of revenue | CAPEX excl licenses and ROU is defined as purchases of property and equipment and intangible assets other than licenses and goodwill. The cash flow forecasts for capital expenditure are based on past experience and amounts budgeted for the following year(s) and include the network roll-outs plans and license requirements. |
Projected license and spectrum payments | The cash flow forecasts for license and spectrum payments for each operating company for the initial five years include amounts for expected renewals and newly available spectrum. Beyond that period, a long-run cost of spectrum is assumed. |
Long-term growth rate | A long‑term growth rate into perpetuity is estimated based on a percentage that is lower than or equal to the country long-term inflation forecast, depending on the CGU. |
CGU | Headroom | Discount rate | Average growth rate | Average operating margin | Average CAPEX excl licenses and ROU / revenue | Terminal growth rate | ||||||
Algeria | 102 | (45 | ) | (80 | ) | — | — | (5 | ) |
12 | PROPERTY AND EQUIPMENT |
Net book value | Telecomm-unications equipment | Land, buildings and constructions | Office and other equipment | Equipment not installed and assets under construction | Right-of-use assets | Total | ||||||
As of January 1, 2018 | 5,132 | 240 | 470 | 395 | — | 6,237 | ||||||
Additions | 52 | 8 | 14 | 1,173 | — | 1,247 | ||||||
Disposals | (51 | ) | (2 | ) | (10 | ) | (5 | ) | — | (68 | ) | |
Depreciation charge for the year | (1,165 | ) | (31 | ) | (143 | ) | — | — | (1,339 | ) | ||
Impairment | (280 | ) | (10 | ) | (8 | ) | (37 | ) | — | (335 | ) | |
Transfers | 979 | 22 | 136 | (1,137 | ) | — | — | |||||
Reclassified to assets held for sale | (15 | ) | (1 | ) | — | — | — | (16 | ) | |||
Translation adjustment | (644 | ) | (24 | ) | (66 | ) | (60 | ) | — | (794 | ) | |
As of December 31, 2018 | 4,008 | 202 | 393 | 329 | — | 4,932 | ||||||
Adjustment due to IFRS 16 | (71 | ) | — | — | — | 2,023 | 1,952 | |||||
Additions | 80 | — | 8 | 1,453 | 158 | 1,699 | ||||||
Disposals | (36 | ) | (1 | ) | (6 | ) | (7 | ) | (35 | ) | (85 | ) |
Depreciation charge for the year | (1,032 | ) | (33 | ) | (139 | ) | — | (448 | ) | (1,652 | ) | |
Impairment | (30 | ) | (1 | ) | (3 | ) | (17 | ) | — | (51 | ) | |
Transfers | 1,210 | 29 | 131 | (1,370 | ) | — | — | |||||
Modifications of right-of-use assets | — | — | — | — | 141 | 141 | ||||||
Translation adjustment | 177 | 20 | 33 | 28 | 146 | 404 | ||||||
As of December 31, 2019 | 4,306 | 216 | 417 | 416 | 1,985 | 7,340 | ||||||
Cost | 11,799 | 493 | 1,467 | 563 | 2,472 | 16,794 | ||||||
Accumulated depreciation and impairment | (7,493 | ) | (277 | ) | (1,050 | ) | (147 | ) | (487 | ) | (9,454 | ) |
Net book value | ROU - Telecommunications Equipment | ROU - Land, Buildings and Constructions | ROU - Office and Other Equipment | Total | ||||
As of January 1, 2019 | 1,601 | 415 | 7 | 2,023 | ||||
Additions | 142 | 16 | — | 158 | ||||
Disposals | (27 | ) | (6 | ) | (2 | ) | (35 | ) |
Depreciation charge for the year | (306 | ) | (140 | ) | (2 | ) | (448 | ) |
Impairment | — | — | — | — | ||||
Transfers | 18 | (18 | ) | — | — | |||
Modifications and reassessments | 94 | 47 | — | 141 | ||||
Translation adjustment | 116 | 30 | — | 146 | ||||
As of December 31, 2019 | 1,638 | 344 | 3 | 1,985 | ||||
Cost | 1,980 | 487 | 5 | 2,472 | ||||
Accumulated depreciation and impairment | (342 | ) | (143 | ) | (2 | ) | (487 | ) |
2019 | 2018 | ||
Less than 1 year | 677 | 433 | |
Between 1 and 5 years | 19 | 4 | |
Total commitments | 696 | 437 |
Class of property and equipment | Useful life |
Telecommunication equipment | 3 – 20 years |
Buildings and constructions | 10 – 50 years |
Office and other equipment | 3 – 10 years |
Right-of-use assets | Equivalent lease term |
13 | INTANGIBLE ASSETS |
Net book value | Telecommuni-cation licenses, frequencies & permissions | Software | Brands and trademarks | Customer relationships | Other intangible assets | Goodwill | Total | |||||||
As of January 1, 2018 | 1,256 | 351 | 262 | 255 | 44 | 4,618 | 6,786 | |||||||
Additions | 526 | 171 | — | — | 20 | — | 717 | |||||||
Disposals | (6 | ) | (1 | ) | — | — | — | — | (7 | ) | ||||
Amortization charge for the year | (176 | ) | (179 | ) | (74 | ) | (54 | ) | (12 | ) | — | (495 | ) | |
Impairment | (251 | ) | (48 | ) | — | — | — | (224 | ) | (523 | ) | |||
Transfer | — | 2 | — | — | (2 | ) | — | — | ||||||
Translation adjustment | (154 | ) | (32 | ) | (10 | ) | (24 | ) | (10 | ) | (578 | ) | (808 | ) |
As of December 31, 2018 | 1,195 | 264 | 178 | 177 | 40 | 3,816 | 5,670 | |||||||
Adjustment due to IFRS 16 | — | — | — | — | (15 | ) | — | (15 | ) | |||||
Additions | 50 | 177 | — | — | 12 | — | 239 | |||||||
Disposals | — | — | — | — | (2 | ) | — | (2 | ) | |||||
Amortization charge for the year | (159 | ) | (155 | ) | (30 | ) | (42 | ) | (8 | ) | — | (394 | ) | |
Impairment | (3 | ) | — | — | — | — | (54 | ) | (57 | ) | ||||
Transfer | — | 8 | — | — | (8 | ) | — | — | ||||||
Translation adjustment | 17 | 22 | 1 | 7 | 3 | 197 | 247 | |||||||
As of December 31, 2019 | 1,100 | 316 | 149 | 142 | 22 | 3,959 | 5,688 | |||||||
Cost | 2,395 | 1,157 | 499 | 1,716 | 210 | 3,959 | 9,936 | |||||||
Accumulated amortization and impairment | (1,295 | ) | (841 | ) | (350 | ) | (1,574 | ) | (188 | ) | (4,248 | ) | ||
CGU | December 31, 2019 | Impairment | Currency translation | December 31, 2018 | ||||
Russia | 2,265 | — | 247 | 2,018 | ||||
Algeria | 1,167 | — | (9 | ) | 1,176 | |||
Pakistan | 335 | — | (36 | ) | 371 | |||
Kazakhstan | 154 | — | 1 | 153 | ||||
Kyrgyzstan | — | (54 | ) | — | 54 | |||
Uzbekistan | 38 | — | (6 | ) | 44 | |||
Total | 3,959 | (54 | ) | 197 | 3,816 |
CGU | December 31, 2018 | Impairment | Translation adjustment | December 31, 2017 | ||||
Russia | 2,018 | — | (416 | ) | 2,434 | |||
Algeria | 1,176 | (125 | ) | (39 | ) | 1,340 | ||
Pakistan | 371 | — | (97 | ) | 468 | |||
Kazakhstan | 153 | — | (24 | ) | 177 | |||
Kyrgyzstan | 54 | (74 | ) | — | 128 | |||
Uzbekistan | 44 | — | (2 | ) | 46 | |||
Armenia | — | (25 | ) | — | 25 | |||
Total | 3,816 | (224 | ) | (578 | ) | 4,618 |
2019 | 2018 | ||||
Less than 1 year | 77 | 23 | |||
Between 1 and 5 years | 5 | — | |||
Total commitments | 82 | 23 |
14 | INVESTMENTS IN SUBSIDIARIES |
Equity interest held by the Group | ||||||
Name of significant subsidiary | Country of incorporation | Nature of subsidiary | 2019 | 2018 | ||
VEON Amsterdam B.V. | Netherlands | Holding | 100.0 | % | 100.0 | % |
VEON Holdings B.V. | Netherlands | Holding | 100.0 | % | 100.0 | % |
PJSC VimpelCom | Russia | Operating | 100.0 | % | 100.0 | % |
JSC “Kyivstar” | Ukraine | Operating | 100.0 | % | 100.0 | % |
LLP “KaR-Tel” | Kazakhstan | Operating | 75.0 | % | 75.0 | % |
LLC “Unitel” | Uzbekistan | Operating | 100.0 | % | 100.0 | % |
LLC “VEON Georgia” | Georgia | Operating | 80.0 | % | 80.0 | % |
CJSC “VEON Armenia” | Armenia | Operating | 100.0 | % | 100.0 | % |
LLC “Sky Mobile” | Kyrgyzstan | Operating | 50.1 | % | 50.1 | % |
VEON Luxembourg Holdings S.à r.l. | Luxembourg | Holding | 100.0 | % | 100.0 | % |
VEON Luxembourg Finance Holdings S.à r.l. | Luxembourg | Holding | 100.0 | % | 100.0 | % |
VEON Luxembourg Finance S.A. | Luxembourg | Holding | 100.0 | % | 100.0 | % |
Global Telecom Holding S.A.E | Egypt | Holding | 99.5 | % | 57.7 | % |
Omnium Telecom Algérie S.p.A.* | Algeria | Holding | 45.4 | % | 26.3 | % |
Optimum Telecom Algeria S.p.A.* | Algeria | Operating | 45.4 | % | 26.3 | % |
Pakistan Mobile Communications Limited | Pakistan | Operating | 85.0 | % | 49.0 | % |
Banglalink Digital Communications Limited | Bangladesh | Operating | 100.0 | % | 57.7 | % |
Equity interest held by NCIs | Book values of material NCIs | Profit / (loss) attributable to material NCIs | ||||||||||
Name of significant subsidiary | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||
LLP “KaR-Tel” (“Kar-Tel”) | 25.0 | % | 25.0 | % | 232 | 228 | 27 | 19 | ||||
LLC “Sky Mobile” (“Sky Mobile”) | 49.9 | % | 49.9 | % | 79 | 133 | (44 | ) | (32 | ) | ||
Global Telecom Holding S.A.E (“GTH”) | 0.5 | % | 42.3 | % | 853 | (1,190 | ) | 75 | (204 | ) | ||
Omnium Telecom Algérie S.p.A. (“OTA”) | 54.4 | % | 73.7 | % | 871 | 1,091 | 55 | 1 | ||||
Kar-Tel | Sky Mobile | GTH | OTA | |||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||
Operating revenue | 461 | 410 | 348 | 63 | 81 | 108 | 2,051 | 2,828 | 3,015 | 775 | 813 | 915 | ||||||||||||
Operating expenses | (319 | ) | (319 | ) | (296 | ) | (150 | ) | (144 | ) | (97 | ) | (1,595 | ) | (2,810 | ) | (2,421 | ) | (621 | ) | (754 | ) | (703 | ) |
Other (expenses) / income | (6 | ) | 6 | (7 | ) | (1 | ) | — | (2 | ) | 947 | * | (377 | ) | (450 | ) | (17 | ) | (11 | ) | (27 | ) | ||
Profit / (loss) before tax | 136 | 97 | 45 | (88 | ) | (63 | ) | 9 | 1,403 | (359 | ) | 144 | 137 | 48 | 185 | |||||||||
Income tax expense | (29 | ) | (20 | ) | (13 | ) | — | (1 | ) | (4 | ) | (136 | ) | (124 | ) | (375 | ) | (36 | ) | (47 | ) | (49 | ) | |
Profit / (loss) for the year | 107 | 77 | 32 | (88 | ) | (64 | ) | 5 | 1,267 | (483 | ) | (231 | ) | 101 | 1 | 136 | ||||||||
Total comprehensive income / (loss) | 107 | 77 | 32 | (88 | ) | (64 | ) | 5 | 1,267 | (483 | ) | (231 | ) | 101 | 1 | 136 | ||||||||
Attributed to NCIs | 27 | 19 | 8 | (44 | ) | (32 | ) | 3 | 75 | (204 | ) | (56 | ) | 55 | 1 | 100 | ||||||||
Dividends paid to NCIs | — | — | — | — | — | — | 95 | 80 | 116 | 69 | 76 | 82 | ||||||||||||
Kar-Tel | Sky Mobile | GTH * | OTA | |||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||
Property and equipment | 271 | 192 | 50 | 76 | 608 | 1,652 | 600 | 498 | ||||||||
Intangible assets | 86 | 69 | 5 | 10 | 160 | 1,042 | 158 | 214 | ||||||||
Other non-current assets | 185 | 177 | 3 | 55 | 2,797 | 1,766 | 1,187 | 1,178 | ||||||||
Trade and other receivables | 18 | 13 | 4 | 3 | 146 | 263 | 34 | 48 | ||||||||
Cash and cash equivalents | 39 | 29 | 21 | 43 | 165 | 420 | 67 | 53 | ||||||||
Other current assets | 12 | 15 | 18 | 12 | 97 | 317 | 42 | 88 | ||||||||
Debt and derivatives | (63 | ) | — | (7 | ) | — | (1,375 | ) | (2,938 | ) | (134 | ) | (63 | ) | ||
Provisions | (6 | ) | (4 | ) | (1 | ) | (2 | ) | (70 | ) | (312 | ) | (22 | ) | (25 | ) |
Other liabilities | (119 | ) | (85 | ) | (24 | ) | (19 | ) | (585 | ) | (1,690 | ) | (334 | ) | (355 | ) |
Total equity | 423 | 406 | 69 | 178 | 1,943 | 520 | 1,598 | 1,636 | ||||||||
Attributed to: | ||||||||||||||||
Equity holders of the parent | 191 | 178 | (10 | ) | 45 | 1,090 | 1,710 | 727 | 545 | |||||||
Non-controlling interests | 232 | 228 | 79 | 133 | 853 | (1,190 | ) | 871 | 1,091 | |||||||
Kar-Tel | Sky Mobile | GTH | OTA | |||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||
Net operating cash flows | 199 | 148 | 105 | 17 | 29 | 23 | 691 | 900 | 877 | 305 | 245 | 345 | ||||||||||||
Net investing cash flows | (84 | ) | (42 | ) | (73 | ) | (15 | ) | (18 | ) | (24 | ) | (529 | ) | (695 | ) | (924 | ) | (84 | ) | (118 | ) | (172 | ) |
Net financing cash flows | (104 | ) | (90 | ) | (48 | ) | (24 | ) | — | — | (395 | ) | (110 | ) | (157 | ) | (205 | ) | (193 | ) | (350 | ) | ||
Net foreign exchange difference | — | (3 | ) | — | — | — | — | (23 | ) | (60 | ) | (18 | ) | (1 | ) | (5 | ) | (7 | ) | |||||
Net increase / (decrease) in cash equivalents | 11 | 13 | (16 | ) | (22 | ) | 11 | (1 | ) | (256 | ) | 35 | (222 | ) | 15 | (71 | ) | (184 | ) |
15 | INVESTMENTS, DEBT AND DERIVATIVES |
Carrying value | ||||
2019 | 2018 | |||
At fair value through profit or loss | ||||
Derivatives not designated as hedges | 11 | 14 | ||
Derivatives designated as net investment hedges | — | 45 | ||
Investments in debt instruments * | 34 | 36 | ||
Other | — | 3 | ||
45 | 98 | |||
At amortized cost | ||||
Security deposits and cash collateral | 256 | 31 | ||
Other investments | 16 | 17 | ||
272 | 48 | |||
Total investments and derivatives | 317 | 146 | ||
Non-current | 235 | 58 | ||
Current | 82 | 88 | ||
Carrying value | ||||
2019 | 2018 | |||
At fair value through profit or loss | ||||
Derivatives not designated as hedges | 52 | 65 | ||
Derivatives designated as net investment hedges | 161 | — | ||
Contingent consideration | 41 | 40 | ||
Other | — | 2 | ||
254 | 107 | |||
At amortized cost | ||||
Principal amount outstanding | 7,519 | 7,298 | ||
Interest accrued | 79 | 81 | ||
Discounts, unamortized fees, hedge basis adjustment | (10 | ) | (13 | ) |
Bank loans and bonds | 7,588 | 7,366 | ||
Lease liabilities | 2,083 | — | ||
Put-option liability over non-controlling interest | 342 | 306 | ||
Other financial liabilities | 77 | 77 | ||
10,090 | 7,749 | |||
Total debt and derivatives | 10,344 | 7,856 | ||
Non-current | 7,759 | 6,567 | ||
Current | 2,585 | 1,289 | ||
Principal amount outstanding | |||||||||
Borrower | Type of debt | Guarantor | Currency | Interest rate | Maturity | 2019 | 2018 | ||
VEON Holdings | Loans | None | RUB | 8.75% to 10.0% | 2022 | 2,303 | 2,051 | ||
VEON Holdings | Notes | None | US$ | 5.2% to 5.95% | 2019 - 2023 | 529 | 1,100 | ||
VEON Holdings | Notes | None | US$ | 3.95% to 4.95% | 2021 - 2024 | 1,133 | 1,133 | ||
VEON Holdings | Notes | PJSC VimpelCom | US$ | 7.50% | 2022 | 417 | 417 | ||
VEON Holdings | Notes | None | US$ | 4.00 % | 2025 | 700 | — | ||
GTH Finance B.V. | Notes | VEON Holdings | US$ | 6.25% to 7.25% | 2020 -2023 | 1,200 | 1,200 | ||
PJSC VimpelCom, via VIP Finance Ireland | Eurobonds | None | US$ | 7.75 % | 2021 | 262 | 262 | ||
PMCL | Loans | None | PKR | 6mKIBOR + 0.35% to 0.8% | 2020 -2022 | 226 | 256 | ||
PMCL | Loan | EKN * | US$ | 6mLIBOR + 1.9% | 2020 | 75 | 137 | ||
PMCL | Loan | None | PKR | 6mKIBOR + 0.75% | 2026 | 121 | — | ||
Banglalink | Loan | None | US$ | 3mLIBOR + 2.50% | 2020 | 300 | — | ||
Banglalink | Notes | None | US$ | 8.63% | 2019 | — | 300 | ||
Banglalink | Loans | None | BDT | Average bank deposit rate + 3.0% to 4.25% | 2020 - 2022 | 116 | 146 | ||
Other bank loans and bonds | 137 | 296 | |||||||
Total bank loans and bonds | 7,519 | 7,298 |
Bank loans and bonds | Lease liabilities | Total | ||||
Balance as of January 1, 2018 | 11,198 | — | 11,198 | |||
Cash flows | ||||||
Proceeds from borrowings, net of fees paid | 807 | — | 807 | |||
Repayment of debt | (4,122 | ) | — | (4,122 | ) | |
Interest paid | (736 | ) | — | (736 | ) | |
Non-cash movements | ||||||
Interest and fee accruals | 738 | — | 738 | |||
Early redemption premium accrued * | 44 | — | 44 | |||
Foreign currency translation | (573 | ) | — | (573 | ) | |
Other non-cash movements | 10 | — | 10 | |||
Balance as of December 31, 2018 | 7,366 | — | 7,366 | |||
Adjustment due to new accounting standards | — | 1,999 | 1,999 | |||
Balance as of January 1, 2019 | 7,366 | 1,999 | 9,365 | |||
Cash flows | ||||||
Proceeds from borrowings, net of fees paid | 2,610 | — | 2,610 | |||
Repayment of debt | (2,612 | ) | (366 | ) | (2,978 | ) |
Interest paid | (566 | ) | (148 | ) | (714 | ) |
Non-cash movements | ||||||
Interest and fee accruals | 599 | 178 | 777 | |||
Lease additions, disposals, impairment and modifications | — | 262 | 262 | |||
Foreign currency translation | 193 | 158 | 351 | |||
Other non-cash movements | (2 | ) | — | (2 | ) | |
Balance as of December 31 | 7,588 | 2,083 | 9,671 |
• | 'Bank loans and bonds, including interest accrued', for which fair value is equal to US$7,887 (2018: US$7,430); and |
• | 'Lease liabilities', for which fair value has not been determined. |
Hedging instruments * | Designated rate | Excluded component | Hedged item | Currency | Aggregated designated nominal value of hedged items, million | |||
2019 | 2018 | |||||||
Foreign currency forward contracts | Forward | foreign currency basis spread | PJSC VimpelCom | RUB | 88,220 | ** | 68,639 | ** |
• | the value of a net investment falling below the related designated nominal value of the hedging instrument, or |
• | counterparties’ credit risk impacting the hedging instrument but not the hedged net investment. |
Foreign currency translation reserve | Cost of hedging reserve ** | |||
As of January 1, 2018 | (7,667 | ) | — | |
Foreign currency revaluation of the foreign operations and other | (753 | ) | — | |
Effective portion of foreign currency revaluation of the hedging instruments * | 83 | — | ||
Change in fair value of foreign currency basis spreads | — | (4 | ) | |
Amortization of time-period related foreign currency basis spreads | — | 5 | ||
Net investment hedge amount reclassified to profit or loss – sale of Italy Joint Venture | 80 | 4 | ||
Disposal of subsidiaries – reclassification to profit or loss | (159 | ) | — | |
As of December 31, 2018 | (8,416 | ) | 5 | |
Foreign currency revaluation of the foreign operations | 332 | — | ||
Effective portion of foreign currency revaluation of the hedging instruments * | (228 | ) | — | |
Change in fair value of foreign currency basis spreads | — | 23 | ||
Amortization of time-period related foreign currency basis spreads | — | (19 | ) | |
As of December 31, 2019 | (8,312 | ) | 9 |
16 | CASH AND CASH EQUIVALENTS |
2019 | 2018 | ||||
Cash and cash equivalents at banks and on hand | 932 | 756 | |||
Cash equivalents with original maturity of less than three months | 318 | 1,052 | |||
Cash and cash equivalents | 1,250 | 1,808 | |||
Less overdrafts | (46 | ) | (17 | ) | |
Cash and cash equivalents, net of overdrafts, as presented in the consolidated statement of cash flows | 1,204 | 1,791 |
17 | FINANCIAL RISK MANAGEMENT |
Effect on profit / (loss) before tax | Effect on other comprehensive income | |||
Change in foreign exchange rate against US$ | 10% depreciation | 10% appreciation | 10% depreciation | 10% appreciation |
2019 | ||||
Euro | (2) | 3 | — | — |
Russian Ruble | (9) | 11 | 119 | (145) |
Bangladeshi Taka | (27) | 30 | — | — |
Pakistani Rupee | (10) | 11 | — | — |
Georgian Lari | (36) | 39 | — | — |
Other currencies (net) | (1) | 2 | — | — |
2018 | ||||
Euro | (2) | 3 | — | — |
Russian Ruble | (32) | 35 | 70 | (77) |
Bangladeshi Taka | (76) | 83 | — | — |
Pakistani Rupee | (19) | 20 | — | — |
Georgian Lari | (34) | 37 | — | — |
Other currencies (net) | — | — | — | — |
Amounts in millions of transactional currency | US$ equivalent amounts | ||||||
Final availability period | Facility amount | Utilized | Available | Facility amount | Utilized | Available | |
2019 | |||||||
VEON Holdings B.V. – Revolving Credit Facility | Feb 2022 | US$1,688 * | — | US$1,688 | 1,688 | — | 1,688 |
PMCL - Syndicated Term Facility and Islamic Finance Facility | Mar 2020 | PKR 45,000 | PKR 15,885 | PKR 29,115 | 291 | 103 | 188 |
PMCL - Term Facility | Sep 2020 | PKR 14,369 | PKR 2,963 | PKR 11,406 | 93 | 19 | 74 |
Amounts in millions of transactional currency | US$ equivalent amounts | ||||||
Final availability period | Facility amount | Utilized | Available | Facility amount | Utilized | Available | |
2018 | |||||||
VEON Holdings B.V. – Revolving Credit Facility | Feb 2022 | US$1,688 | — | US$1,688 | 1,688 | — | 1,688 |
PMCL - Syndicated Term Loan Facility | Jun 2019 | PKR 26,750 | PKR 17,000 | PKR 9,750 | 191 | 122 | 69 |
PMCL - Term Loan Facility | Jun 2019 | PKR 10,000 | PKR 5,463 | PKR 4,537 | 72 | 39 | 33 |
Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | ||||||
As of December 31, 2019 | ||||||||||
Bank loans and bonds | 2,100 | 3,909 | 2,009 | 794 | 8,812 | |||||
Lease liabilities | 581 | 920 | 728 | 420 | 2,649 | |||||
Derivative financial liabilities | ||||||||||
Gross cash inflows | (1,150 | ) | (378 | ) | — | — | (1,528 | ) | ||
Gross cash outflows | 1,311 | 483 | — | — | 1,794 | |||||
Trade and other payables | 1,847 | — | — | — | 1,847 | |||||
Other financial liabilities | 41 | 77 | — | — | 118 | |||||
Warid non-controlling interest put option liability | 342 | — | — | — | 342 | |||||
Total financial liabilities | 5,072 | 5,011 | 2,737 | 1,214 | 14,034 | |||||
Related derivatives financial assets | ||||||||||
Gross cash inflows | (273 | ) | — | — | — | (273 | ) | |||
Gross cash outflows | 262 | — | — | — | 262 | |||||
Related derivative financial assets | (11 | ) | — | — | — | (11 | ) | |||
Total financial liabilities, net of derivative assets | 5,061 | 5,011 | 2,737 | 1,214 | 14,023 |
Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | ||||||
As of December 31, 2018 | ||||||||||
Bank loans and bonds | 1,697 | 3,866 | 2,642 | 579 | 8,784 | |||||
Derivative financial liabilities | ||||||||||
Gross cash inflows | (368 | ) | (54 | ) | — | — | (422 | ) | ||
Gross cash outflows | 394 | 68 | — | — | 462 | |||||
Trade and other payables * | 1,624 | — | — | — | 1,624 | |||||
Other financial liabilities | — | 62 | — | — | 62 | |||||
Warid non-controlling interest put option liability | — | 306 | — | — | 306 | |||||
Total financial liabilities | 3,347 | 4,248 | 2,642 | 579 | 10,816 | |||||
Related derivatives financial assets | ||||||||||
Gross cash inflows | (300 | ) | (610 | ) | (330 | ) | — | (1,240 | ) | |
Gross cash outflows | 286 | 634 | 354 | — | 1,274 | |||||
Related derivative financial assets | (14 | ) | 24 | 24 | — | 34 | ||||
Total financial liabilities, net of derivative assets | 3,333 | 4,272 | 2,666 | 579 | 10,850 |
18 | ISSUED CAPITAL AND RESERVES |
2019 | 2018 | |||
Authorized common shares (nominal value of US$0.001 per share) | 1,849,190,670 | 1,849,190,670 | ||
Issued shares, including 7,603,731 shares held by a subsidiary of the Company | 1,756,731,135 | 1,756,731,135 | ||
Shareholder | Common shares | % of common and voting shares | ||
L1T VIP Holdings S.à r.l. (“LetterOne”) | 840,625,001 | 47.9 | % | |
Stichting Administratiekantoor Mobile Telecommunications Investor * | 145,947,562 | 8.3 | % | |
Free Float, including 7,603,731 shares held by a subsidiary of the Company | 770,158,572 | 43.8 | % | |
Total outstanding common shares | 1,756,731,135 | 100.0 | % | |
19 | EARNINGS PER SHARE |
Continuing operations | 2019 | 2018 | 2017 | |||||||
(In millions of U.S. dollars, except share and per share amounts) | ||||||||||
Numerator: | ||||||||||
Profit / (loss) for the period attributable to the owners of the parent | 621 | (397 | ) | (115 | ) | |||||
Denominator: | ||||||||||
Weighted average common shares outstanding for basic earnings per share (in millions) | 1,749 | 1,749 | 1,749 | |||||||
Denominator for diluted earnings per share (in millions) | 1,749 | 1,749 | 1,749 | |||||||
Basic (loss) / earnings per share | $0.36 | ($0.23 | ) | ($0.07 | ) | |||||
Diluted (loss) / earnings per share | $0.36 | ($0.23 | ) | ($0.07 | ) |
Discontinued operations | 2019 | 2018 | 2017 | |||||||
(In millions of U.S. dollars, except share and per share amounts) | ||||||||||
Numerator: | ||||||||||
Profit / (loss) for the period attributable to the owners of the parent | — | 979 | (390 | ) | ||||||
Denominator: | ||||||||||
Weighted average common shares outstanding for basic earnings per share (in millions) | 1,749 | 1,749 | 1,749 | |||||||
Denominator for diluted earnings per share (in millions) | 1,749 | 1,749 | 1,749 | |||||||
Basic (loss) / earnings per share | $0.00 | $0.56 | ($0.22 | ) | ||||||
Diluted (loss) / earnings per share | $0.00 | $0.56 | ($0.22 | ) |
20 | DIVIDENDS PAID AND PROPOSED |
(a) | VEON is, or would after the payment be, unable to pay its liabilities as they become due, or |
(b) | the realizable value of VEON assets would, as a result of the dividend, be less than the aggregate of VEON liabilities. |
Description | Dividends declared | Dividends paid | Dividends, US$ cents per share |
Final for 2019 | February 2020 | Expected March 2020 | 15 |
Interim for 2019 | August 2019 | August 2019 | 13 |
Final for 2018 | February 2019 | March 2019 | 17 |
Interim for 2018 | August 2018 | August 2018 | 12 |
Name of subsidiary | Dividend declared | Dividend paid | Paid or payable to non-controlling interests | |
Omnium Telecom Algeria S.p.A | June 2019 | September 2019 | 69 | |
VIP Kazakhstan Holding AG | January 2019 | January 2019 | 24 | |
TNS Plus LLP | April 2019 | April 2019 | 12 | |
Rascom CJSC | June 2019 | August 2019 | 3 | |
Total for 2019 | 108 | |||
Omnium Telecom Algeria S.p.A | June 2018 | August 2018 | 76 | |
TNS Plus LLP | April 2018 | April 2018 | 11 | |
TNS Plus LLP | April 2018 | August 2018 | 2 | |
Rascom CJSC | June 2018 | July 2018 | 2 | |
Buzton LLC | July 2018 | September 2018 | 2 | |
Total for 2018 | 93 | |||
VIP Kazakhstan Holding AG | October 2017 | October 2017 | 11 | |
Omnium Telecom Algeria S.p.A | June 2017 | August 2017 | 82 | |
TNS Plus LLP | May 2017 | May 2017 | 12 | |
VIP Kyrgyzstan Holding AG | February 2017 | February 2017 | 55 | |
TNS Plus LLP | January 2017 | January 2017 | 8 | |
Total for 2017 | 168 |
21 | RELATED PARTIES |
2019 | 2018 | 2017 | ||||
Short-term employee benefits | 48 | 33 | 42 | |||
Long-term employee benefits | — | — | 1 | |||
Share-based payments | 3 | — | 1 | |||
Termination benefits | — | 2 | 1 | |||
Total compensation to directors and senior management * | 51 | 35 | 45 |
In whole euros | Ursula Burns | Jean-Yves Charlier | Trond Westlie | Murat Kirkgoz | Kjell Johnsen | Kaan Terzioglu | Sergi Herrero | Scott Dresser | ||||||||
Group CEO | Group CEO | Group CFO(v) | Deputy Group CFO(v) | Group COO(vi) | Joint Group COO(vi) | Joint Group COO(vi) | Group General Counsel | |||||||||
2019 | ||||||||||||||||
Short-term employee benefits | ||||||||||||||||
Base salary(i) | 5,500,000 | — | 1,500,000 | 264,500 | 1,250,000 | 220,500 | 342,036 | 1,300,000 | ||||||||
Annual incentive(ii) | 10,461,000 | — | 1,455,216 | 211,713 | 4,184,355 | 472,151 | 514,460 | 2,258,882 | ||||||||
Other(iii) | 1,146,503 | — | 24,100 | 35,750 | 46,857 | 105,999 | 1,560,229 | 29,100 | ||||||||
Long-term employee benefits | — | — | — | — | — | — | — | — | ||||||||
Share-based payments(iv) | — | — | 64,842 | 8,242 | (828,047 | ) | — | — | (697,504 | ) | ||||||
Termination benefits | — | — | — | — | — | — | — | — | ||||||||
Total remuneration expense | 17,107,503 | — | 3,044,158 | 520,205 | 4,653,165 | 798,650 | 2,416,725 | 2,890,478 | ||||||||
2019 | ||||||||||||||||
Short-term employee benefits | ||||||||||||||||
Base salary(i) | 5,500,000 | — | 1,500,000 | 264,500 | 1,250,000 | 220,500 | 342,036 | 1,300,000 | ||||||||
Annual incentive(ii) | 5,472,400 | — | 1,412,613 | — | 3,766,855 | — | — | 2,470,653 | ||||||||
Other(iii) | 1,146,503 | — | 24,100 | 35,750 | 46,857 | 105,999 | 1,560,229 | 29,100 | ||||||||
Long-term employee benefits | — | — | — | — | — | — | — | — | ||||||||
Share-based payments | 2,791,290 | — | — | — | — | — | — | — | ||||||||
Termination benefits | — | — | — | — | — | — | — | — | ||||||||
Total remuneration paid | 14,910,193 | — | 2,936,713 | 300,250 | 5,063,712 | 326,499 | 1,902,265 | 3,799,753 | ||||||||
2018 | ||||||||||||||||
Short-term employee benefits | ||||||||||||||||
Base salary(i) | 4,602,902 | 1,902,600 | 1,500,000 | — | 1,425,000 | — | — | 1,233,333 | ||||||||
Annual incentive(ii) | — | 7,717,900 | 127,313 | — | — | — | — | 405,899 | ||||||||
Other(iii) | 104,645 | 489,070 | 21,695 | — | 70,442 | — | — | 927,489 | ||||||||
Long-term employee benefits | — | — | — | — | — | — | — | — | ||||||||
Share-based payments | — | — | — | — | — | — | — | — | ||||||||
Termination benefits | — | 1,340,278 | — | — | — | — | — | — | ||||||||
Total remuneration paid | 4,707,547 | 11,449,848 | 1,649,008 | — | 1,495,442 | — | — | 2,566,721 |
In whole US dollars | Ursula Burns | Jean-Yves Charlier | Trond Westlie | Murat Kirkgoz | Kjell Johnsen | Kaan Terzioglu | Sergi Herrero | Scott Dresser | ||||||||
Group CEO | Group CEO | Group CFO(v) | Deputy Group CFO(v) | Group COO(vi) | Joint Group COO(vi) | Joint Group COO(vi) | Group General Counsel | |||||||||
2019 | ||||||||||||||||
Short-term employee benefits | ||||||||||||||||
Base salary(i) | 6,155,568 | — | 1,678,791 | 296,027 | 1,398,993 | 246,782 | 382,805 | 1,454,952 | ||||||||
Annual incentive(ii) | 11,707,890 | — | 1,628,669 | 236,948 | 4,683,106 | 528,429 | 575,781 | 2,528,128 | ||||||||
Other(iii) | 1,283,159 | — | 26,973 | 40,011 | 52,442 | 118,633 | 1,746,199 | 32,569 | ||||||||
Long-term employee benefits | — | — | — | — | — | — | — | — | ||||||||
Share-based payments(iv) | — | — | 72,571 | 9,224 | (926,745 | ) | — | — | (780,642 | ) | ||||||
Termination benefits | — | — | — | — | — | — | — | — | ||||||||
Total remuneration expense | 19,146,617 | — | 3,407,004 | 582,210 | 5,207,796 | 893,844 | 2,704,785 | 3,235,007 | ||||||||
2019 | ||||||||||||||||
Short-term employee benefits | ||||||||||||||||
Base salary(i) | 6,155,568 | — | 1,678,791 | 296,027 | 1,398,993 | 246,782 | 382,800 | 1,454,952 | ||||||||
Annual incentive(ii) | 6,124,678 | — | 1,580,988 | — | 4,215,842 | — | — | 2,765,140 | ||||||||
Other(iii) | 1,283,160 | — | 26,973 | 40,011 | 52,442 | 118,633 | 1,746,175 | 32,569 | ||||||||
Long-term employee benefits | — | — | — | — | — | — | — | — | ||||||||
Share-based payments | 3,123,996 | — | — | — | — | — | — | — | ||||||||
Termination benefits | — | — | — | — | — | — | — | — | ||||||||
Total remuneration paid | 16,687,402 | — | 3,286,752 | 336,038 | 5,667,277 | 365,415 | 2,128,975 | 4,252,661 | ||||||||
2018 | ||||||||||||||||
Short-term employee benefits | ||||||||||||||||
Base salary(i) | 5,429,871 | 2,244,426 | 1,769,494 | — | 1,681,019 | — | — | 1,454,917 | ||||||||
Annual incentive(ii) | — | 9,104,518 | 150,186 | — | — | — | — | 478,824 | ||||||||
Other(iii) | 123,446 | 576,938 | 25,593 | — | 83,098 | — | — | 1,094,124 | ||||||||
Long-term employee benefits | — | — | — | — | — | — | — | — | ||||||||
Share-based payments | — | — | — | — | — | — | — | — | ||||||||
Termination benefits | — | 1,581,076 | — | — | — | — | — | — | ||||||||
Total remuneration paid | 5,553,317 | 13,506,958 | 1,945,273 | — | 1,764,117 | — | — | 3,027,865 |
Retainer | Committees | Other compensation | Total | |||||||||||||
In whole euros | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||
Guillaume Bacuvier | 250,000 | 105,000 | 53,909 | 21,000 | — | — | 303,909 | 126,000 | ||||||||
Osama Bedier | 250,000 | 105,000 | 25,000 | 10,500 | — | — | 275,000 | 115,500 | ||||||||
Ursula Burns * | — | — | 5,952 | — | — | — | 5,952 | — | ||||||||
Stan Chudnovsky | — | 145,833 | — | — | — | — | — | 145,833 | ||||||||
Mikhail Fridman | 40,000 | 40,000 | — | — | — | — | 40,000 | 40,000 | ||||||||
Gennady Gazin | 250,000 | 250,000 | 80,000 | 65,500 | — | — | 330,000 | 315,500 | ||||||||
Andrei Gusev | 40,000 | 40,000 | — | — | 750,000 | — | 790,000 | 40,000 | ||||||||
Gunnar Holt | 250,000 | 250,000 | 69,643 | 50,000 | — | — | 319,643 | 300,000 | ||||||||
Sir Julian Horn-Smith | 250,000 | 250,000 | 25,000 | 10,500 | — | — | 275,000 | 260,500 | ||||||||
Jørn P. Jensen | — | 163,333 | — | — | — | — | — | 163,333 | ||||||||
Robert Jan van de Kraats | 250,000 | 105,000 | 30,000 | 12,600 | — | — | 280,000 | 117,600 | ||||||||
Guy Laurence | 250,000 | 250,000 | 30,000 | 41,600 | — | 16,250 | 280,000 | 307,850 | ||||||||
Alexander Pertsovsky | 40,000 | 40,000 | — | — | — | — | 40,000 | 40,000 | ||||||||
Kaan Terzioglu | 92,708 | — | 9,063 | — | — | — | 101,771 | — | ||||||||
Total compensation | 1,962,708 | 1,744,166 | 328,567 | 211,700 | 750,000 | 16,250 | 3,041,275 | 1,972,116 |
Retainer | Committees | Other compensation | Total | |||||||||||||
In whole US dollars | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||
Guillaume Bacuvier | 279,799 | 123,869 | 60,335 | 24,774 | — | — | 340,134 | 148,643 | ||||||||
Osama Bedier | 279,799 | 123,869 | 27,980 | 12,387 | — | — | 307,779 | 136,256 | ||||||||
Ursula Burns * | — | — | 6,661 | — | — | — | 6,661 | — | ||||||||
Stan Chudnovsky | — | 172,039 | — | — | — | — | — | 172,039 | ||||||||
Mikhail Fridman | 44,768 | 47,188 | — | — | — | — | 44,768 | 47,188 | ||||||||
Gennady Gazin | 279,799 | 294,925 | 89,536 | 77,270 | — | — | 369,335 | 372,195 | ||||||||
Andrei Gusev | 44,768 | 47,188 | — | — | 839,396 | — | 884,164 | 47,188 | ||||||||
Gunnar Holt | 279,799 | 294,925 | 77,944 | 58,985 | — | — | 357,743 | 353,910 | ||||||||
Sir Julian Horn-Smith | 279,799 | 294,925 | 27,980 | 12,387 | — | — | 307,779 | 307,312 | ||||||||
Jørn P. Jensen | — | 192,684 | — | — | — | — | — | 192,684 | ||||||||
Robert Jan van de Kraats | 279,799 | 123,869 | 33,576 | 14,864 | — | — | 313,375 | 138,733 | ||||||||
Guy Laurence | 279,799 | 294,925 | 33,576 | 49,076 | — | 19,170 | 313,375 | 363,171 | ||||||||
Alexander Pertsovsky | 44,768 | 47,188 | — | — | — | — | 44,768 | 47,188 | ||||||||
Kaan Terzioglu | 103,758 | — | 10,143 | — | — | — | 113,901 | — | ||||||||
Total compensation | 2,196,655 | 2,057,594 | 367,731 | 249,743 | 839,396 | 19,170 | 3,403,782 | 2,326,507 |
22 | EVENTS AFTER THE REPORTING PERIOD |
23 | BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS |
• | Goodwill of US$3,816 is now presented within Intangible assets (previously within Goodwill); |
• | Income tax provision of US$164 is now presented within Current income tax payable (previously within current Provisions); |
• | Certain customer advances of US$192 is now presented within current Trade and other payables (previously within current Other liabilities); |
• | Investments and derivatives (non-current) of US$58 is now presented separately (previously within non-current Other assets); |
• | Current income tax assets of US$112 is now presented separately (previously within current Other assets); |
• | Current income tax payable of US$196 is now presented separately (previously within current Other liabilities). |
24 | SIGNIFICANT ACCOUNTING POLICIES |
Significant accounting judgment / source of estimation uncertainty | Described in |
Revenue recognition | Note 3 |
Deferred tax assets and uncertain tax positions | Note 9 |
Provisions | Note 8 |
Impairment of non-current assets | Note 11 |
Control over subsidiaries | Note 14 |
Depreciation and amortization of non-current assets | Note 12 and Note 13 |
Fair value of financial instruments | Note 15 |
Measurement of lease liabilities | Note 15 |
December 31, 2018 | Impact of IFRS 16 | January 1, 2019 | ||||
Assets | ||||||
Non-current assets | ||||||
Property and equipment | ||||||
Property and equipment | 4,932 | (71 | ) | 4,861 | ||
Right-of-use assets | — | 2,023 | 2,023 | |||
Intangible assets | 1,854 | (15 | ) | 1,839 | ||
Goodwill | 3,816 | — | 3,816 | |||
Deferred tax assets | 197 | — | 197 | |||
Other assets | 193 | (1 | ) | 192 | ||
Total non-current assets | 10,992 | 1,936 | 12,928 | |||
Current assets | ||||||
Trade and other receivables | 577 | (61 | ) | 516 | ||
Other current assets | 2,516 | — | 2,516 | |||
Total current assets | 3,093 | (61 | ) | 3,032 | ||
Assets classified as held for sale | 17 | 4 | 21 | |||
Total assets | 14,102 | 1,879 | 15,981 | |||
Equity | ||||||
Equity attributable to equity owners of the parent | 3,670 | (3 | ) | 3,667 | ||
Non-controlling interest | (891 | ) | (1 | ) | (892 | ) |
Total equity | 2,779 | (4 | ) | 2,775 | ||
Non-current liabilities | ||||||
Debt and derivatives | 6,567 | (45 | ) | 6,522 | ||
Provisions | 110 | — | 110 | |||
Lease liabilities | — | 1,638 | 1,638 | |||
Deferred tax liabilities | 180 | — | 180 | |||
Other liabilities | 53 | (9 | ) | 44 | ||
Total non-current liabilities | 6,910 | 1,584 | 8,494 | |||
Current liabilities | ||||||
Trade and other payables | 1,432 | (54 | ) | 1,378 | ||
Debt and derivatives | 1,289 | (6 | ) | 1,283 | ||
Lease liabilities | — | 361 | 361 | |||
Provisions | 398 | (3 | ) | 395 | ||
Other liabilities | 1,290 | (3 | ) | 1,287 | ||
Total current liabilities | 4,409 | 295 | 4,704 | |||
Liabilities associated with assets held for sale | 4 | 4 | 8 | |||
Total equity and liabilities | 14,102 | 1,879 | 15,981 |
• | Change in lease price due to indexation or rate which has become effective in reporting period |
• | Modifications to the lease contract |
• | Reassessment of the lease term |
• | IFRS 16 applied only to contracts that were previously assessed as leases in accordance with the previous IFRS standards (IAS 17 Leases and IFRIC 4 Determining whether and Arrangement contains a Lease); |
• | a single discount rate applied to a portfolio of leases with reasonably similar characteristics as permitted by IFRS 16; |
• | initial direct cost was excluded from the measurement of the right-of-use asset as of January 1, 2019; |
• | the Group's onerous contract provision process used as the impairment assessment of right-of-use assets upon transition. |
US$ | ||
Operating lease commitments as of December 31, 2018 (see Note 4) | 632 | |
Increase in lease commitments of cancelable leases included in reasonably certain lease term | 1,846 | |
Use of IFRS 16 practical expedients (old lease accounting continues for exceptions) | (4 | ) |
Leases commencing subsequent to transition date committed to as of December 31, 2018 | (47 | ) |
Accruals included in the lease liability calculation | 59 | |
Other | 22 | |
Total undiscounted lease payments which are reasonably certain | 2,508 | |
Discounting effect using incremental borrowing rate | (559 | ) |
IAS 17 finance lease liabilities recognized on balance sheet as of December 31, 2018 (discounted) | 54 | |
IFRS 16 Lease liability recognized on balance sheet as of January 1, 2019 | 2,003 | |
IFRS 16 lease liability presented as | ||
Non-current | 1,638 | |
Current | 361 | |
Liabilities associated with assets held for sale | 4 | |
2,003 |
2019 | 2018 | 2017 | ||||
Non-current assets | ||||||
Intangible assets | 10 | 9 | 37 | |||
Tangible fixed assets | 15 | 4 | 7 | |||
Financial fixed assets | 1,152 | 3,590 | 4,236 | |||
Total non-current assets | 1,177 | 3,603 | 4,280 | |||
Total current assets | 393 | 435 | 394 | |||
Total assets | 1,570 | 4,038 | 4,674 | |||
Equity | 1,226 | 3,670 | 4,331 | |||
Total liabilities | 344 | 368 | 343 | |||
Total equity and liabilities | 1,570 | 4,038 | 4,674 |
2019 | 2018 | 2017 | ||||
Selling, general and administrative expenses | (160 | ) | (240 | ) | (177 | ) |
Other operating gains | 350 | — | — | |||
Recharged expenses to group companies | 21 | 47 | 60 | |||
Operating (loss) / profit | 211 | (193 | ) | (117 | ) | |
Finance income and (costs) | 6 | 4 | — | |||
Share in result of subsidiaries after tax | 404 | 771 | (387 | ) | ||
Income tax | — | — | (1 | ) | ||
Total non-operating income and expenses | 410 | 775 | (388 | ) | ||
Profit / (loss) for the year | 621 | 582 | (505 | ) |
2019 | 2018 | 2017 | ||||
Total comprehensive loss for the year, net of tax | 733 | (138 | ) | (1,081 | ) |
2019 | 2018 | 2017 | ||||
Net cash flows from operating activities | (213 | ) | 23 | (313 | ) | |
Investing activities | ||||||
Receipt of dividends | — | 571 | 1,392 | |||
Receipt of capital surplus from a subsidiary | 650 | — | — | |||
Other cash flows from investing activities | 101 | (76 | ) | (17 | ) | |
Net cash flows used in investing activities | 751 | 495 | 1,375 | |||
Financing activities | ||||||
Proceeds from borrowings net of fees paid | — | — | 606 | |||
Repayment of borrowings | — | — | (1,168 | ) | ||
Dividends paid to equity owners of the parent | (522 | ) | (505 | ) | (518 | ) |
Share capital issued and paid | — | — | — | |||
Net cash flows generated from/(used in) financing activities | (522 | ) | (505 | ) | (1,080 | ) |
Net increase (decrease) in cash and cash equivalents | 16 | 13 | (18 | ) | ||
Net foreign exchange difference | — | 1 | (3 | ) | ||
Cash and cash equivalents at beginning of period | 19 | 5 | 26 | |||
Cash and cash equivalents at end of period | 35 | 19 | 5 |
• | participate in shareholder meetings; |
• | have one vote on all issues voted upon at a shareholder meeting, except for the purposes of cumulative voting for the election of the Board, in which case each common share shall have the same number of votes as the total number of members to be elected to the Board and all such votes may be cast for a single candidate or may be distributed between or among two or more candidates; |
• | receive dividends approved by the Board; |
• | in the event of our liquidation, receive a pro rata share of our surplus assets; and |
• | exercise any other rights of a common shareholder set forth in our bye-laws and Bermuda law. |
• | it is proposed by or at the direction of the Board; |
• | it is proposed at the direction of a court; |
• | it is proposed on the requisition in writing of such number of shareholders as is prescribed by, and is made in accordance with, the relevant provisions of the Companies Act or our bye-laws; or |
• | the chairman of the meeting in his absolute discretion decides that the resolution may properly be regarded as within the scope of the meeting. |
• | any sale of all or substantially all of our assets; |
• | the appointment of an auditor; |
• | removal of directors; and |
• | any issue of securities of the Company described under NASDAQ Listing Rule 5635 (Shareholder Approval) (or any successor thereto) other than for any stock option plans or other equity compensation plans or in any other circumstance described under NASDAQ Listing Rule 5635(c) (Equity Compensation) (or any successor thereto. |
• | “whitewash” procedure for mandatory offers, which requires the affirmative vote of a majority of the shareholders voting in person or by proxy at a general meeting, excluding the vote of the shareholder or shareholders in question and their affiliates; |
• | voting for directors, which requires directors to be elected by cumulative voting at each annual general meeting; |
• | changes to our Bye-laws, which require a resolution to be passed by shareholders representing not less than 75.0% of the total voting rights of the shareholders who vote in person or by proxy on the resolution; |
• | any merger, consolidation, amalgamation, conversion, reorganization, scheme of arrangement, dissolution or liquidation, which requires a resolution to be passed by shareholders representing not less than 75.0% of the total voting rights of the shareholders who vote in person or by proxy on the resolution; |
• | loans to any director, which require a resolution to be passed by shareholders representing not less than 90.0% of the total voting rights of the shareholders who vote in person or by proxy on the resolution; and |
• | the discontinuation of the Company to a jurisdiction outside Bermuda, which requires a resolution to be passed by shareholders representing not less than 75.0% of the total voting rights of the shareholders who vote in person or by proxy on the resolution. |
• | ensure that the surrendered receipt is properly endorsed or otherwise in proper form for transfer; |
• | provide such proof of identity and genuineness of signatures as the Depositary deems appropriate; |
• | provide any transfer stamps required by the State of New York or the United States; and |
• | pay all applicable fees, charges, expenses, taxes and other government charges payable by shareholders pursuant to the terms of the Deposit Agreement, upon the transfer of receipts. |
• | temporary delays that may arise because (i) the transfer books for the shares or ADSs are closed, or (ii) shares are immobilized on account of a shareholders' meeting or a payment of dividends; |
• | obligations to pay fees, taxes and similar charges; and/or |
• | restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit. |
• | The Company and the Depositary are obligated only to take the actions specifically stated in the Deposit Agreement without negligence or bad faith. |
• | The Depositary disclaims any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided it acts in good faith and in accordance with the terms of the Deposit Agreement. |
• | The Depositary disclaims any liability for any failure to determine the lawfulness or practicality of any action, for the content of any document forwarded to shareholders on the Company’s behalf or for the accuracy of any translation of such a document, for the investment risks associated with investing in shares, for the validity or worth of the shares, for any tax consequences that result from the ownership of ADSs, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the Deposit Agreement, for the timeliness of any of the Company’s notices or for its failure to give notice. |
• | The Company and the Depositary will not be obligated to perform any act that is inconsistent with the terms of the Deposit Agreement. |
• | The Company and the Depositary disclaim any liability if the Company or the Depositary are prevented or forbidden from or subject to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the Deposit Agreement, by reason of any provision, present or future of any law or regulation of the United States, Bermuda, or any other country, or by reason of present or future provision of any provision of the Company’s Organizational Documents, or any provision of or governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond the Company’s control. |
• | The Company and the Depositary disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Company’s Organizational Documents or in any provisions of or governing the securities on deposit. |
• | The Company and the Depositary further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting shares for deposit, any shareholder of ADSs or authorized representatives thereof, or any other person believed by either of us in good faith to be competent to give such advice or information. |
• | The Company and the Depositary also disclaim liability for the inability by a shareholder to benefit from any distribution, offering, right or other benefit that is made available to shareholders of shares but is not, under the terms of the Deposit Agreement, made available to shareholders of ADSs. |
• | The Company and the Depositary may rely without any liability upon any written notice, request or other document believed to be genuine and to have been signed or presented by the proper parties. |
• | The Company and the Depositary also disclaim liability for any consequential or punitive damages for any breach of the terms of the Deposit Agreement. |
• | No disclaimer of any Securities Act liability is intended by any provision of the Deposit Agreement. |
Name of significant subsidiary | Country of incorporation | Nature of subsidiary | Percentage of ownership interest | |
VEON Amsterdam B.V. | Netherlands | Holding | 100.0 | % |
VEON Holdings B.V. | Netherlands | Holding | 100.0 | % |
PJSC VimpelCom | Russia | Operating | 100.0 | % |
JSC “Kyivstar” | Ukraine | Operating | 100.0 | % |
LLP “KaR-Tel” | Kazakhstan | Operating | 75.0 | % |
LLC “Unitel” | Uzbekistan | Operating | 100.0 | % |
LLC “VEON Georgia” | Georgia | Operating | 80.0 | % |
CJSC “VEON Armenia” | Armenia | Operating | 100.0 | % |
LLC “Sky Mobile” | Kyrgyzstan | Operating | 50.1 | % |
VEON Luxembourg Holdings S.à r.l. | Luxembourg | Holding | 100.0 | % |
VEON Luxembourg Finance Holdings S.à r.l. | Luxembourg | Holding | 100.0 | % |
VEON Luxembourg Finance S.A. | Luxembourg | Holding | 100.0 | % |
Global Telecom Holding S.A.E | Egypt | Holding | 99.5 | % |
Omnium Telecom Algérie S.p.A.* | Algeria | Holding | 45.4 | % |
Optimum Telecom Algeria S.p.A.* | Algeria | Operating | 45.4 | % |
Pakistan Mobile Communications Limited | Pakistan | Operating | 85.0 | % |
Banglalink Digital Communications Limited | Bangladesh | Operating | 100.0 | % |
1. | I have reviewed this annual report on Form 20-F of VEON Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
1. | I have reviewed this annual report on Form 20-F of VEON Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
1. | I have reviewed this annual report on Form 20-F of VEON Ltd.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and |
5. | The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions): |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting. |
Abbreviation | Definition | |
“2G” | The second-generation mobile telephony system based on the standards defined by the ITU. | |
“3G” | The third-generation mobile telephony system based on the standards defined by the ITU | |
“4G/LTE” | The fourth-generation/long-term evolution mobile technologies, including WiMax, based on the standards defined by the ITU | |
“5G” | Fifth generation mobile networks | |
“ADSL” | Asymmetric digital subscriber line | |
“ANO” | Alternative network operator | |
“API” | Application programming interface | |
“ARPU” | Average revenue per user of telephone services, calculated over a given period of time for the average number of total customers or of active customers in the same period | |
“B2B” | Business to business | |
“B2C” | Business to company | |
“B2O” | Business to operation | |
“Broadband” | A high-capacity network backbone providing connectivity between sites and that picks up and conveys the traffic of lower-capacity peripheral rings | |
“BTS” | Base transceiver station: fixed transmitter/receiver equipment located within cells of a mobile telecommunications network that enables communications by means of radio signals with mobile telephones | |
“CAMEL” | Customized Applications for Mobile network Enhanced Logic | |
“CDMA” | Code division multiple access | |
“Churn” | A measure of the proportion of a business unit’s customer base that disconnects from such business unit’s service over a period of time. Prepaid and postpaid churn rates are each calculated by dividing the respective total number of prepaid or postpaid customer disconnections (including customers who disconnect and reactivate with the same phone number) for the period by the average number of prepaid or postpaid customers for the period. The average number of customers for the period is calculated by taking the average of each month’s average number of prepaid or postpaid customers (calculated as the average of the total number of customers at month-end and the total number of customers at the end of the previous month) during the period. A business unit’s total churn rate is the weighted average of such business unit’s prepaid churn rate and postpaid churn rate over the period, based on weighted number of prepaid and postpaid customers | |
“Customer” | For mobile line telephone services, the terms refer to anyone: (a) who is a holder of a SIM card; and (b) in the event of prepaid services, anyone who has made at least one recharge after the second month of making the SIM purchase | |
“DFS” | Digital financial services | |
“DSL” | Digital subscriber line | |
“DWDM” | Dense wavelength divisions multiplexing | |
“EDGE” | Enhanced data rates for GSM Evolution: evolution of data communications within the existing GSM standard. Designed as a step forward from GPRS, EDGE improves the GSM radio interface in that it increases the data transfer speed by optimizing use of the available spectrum | |
“FMC” | Fix mobile convergence (charging subscribers who use both mobile and fixed fiber connect from a single account) | |
“FOL” | Fiber optical line | |
“FTR” | Fixed termination rate | |
“FTTB” | Fiber-to-the-building |
“GPRS” | General packet radio service: data transmission technology using packet-based transmission for providing mobile telecommunications | |
“GSM” | Global System for Mobile Communications: a mobile-telephony standard based on digital transmission and cellular network architecture with a roaming system | |
“GSM900” | Mobile telephone services using GSM in the 900 MHz frequency range | |
“GSM900/1800” | Mobile telephone services using the GSM standard in the 900 MHz and 1800 MHz frequency ranges | |
“GSM1800” | Mobile telephone services using GSM in the 1800 MHz frequency range | |
“HSPA” | High-speed packet access | |
“ICX” | Interconnection exchange | |
“IEEE” | Institute of Electrical and Electronics Engineers (a professional association which creates and maintains standards for wireless network products) | |
“IGW” | International gateway | |
“IIG” | International internet gateway | |
“ILD” | International long distance | |
“Incumbent” | The term defining the telephone carrier company which once had a monopoly on the market, and now has a dominating position on a free market | |
“Internet” | Internet of things | |
“IP” | Internet protocol: the universal communications protocol based on the exchange of packets of information between telecommunications equipment. It is the standard protocol used on the internet | |
“IPTSP” | Internet protocol telephony service provider | |
“IPTV” | Internet protocol television | |
“IP VPN” | IP virtual private network | |
“ISDN” | Integrated services digital network | |
“ISP” | Internet service provider: provider of access to the internet and to the service linked to the latter | |
“IVR” | Interactive voice response | |
“L2VPN” | Layer-2 virtual private network | |
“LDI” | Long distance and international | |
“LLU” | Local loop unbundling (In Italy, this is the regulatory process of allowing multiple telecommunications operators to use connections from Telecom Italia’s local exchanges to the customer’s premises) | |
“M2M” | Machine to machine | |
“Mbps” | Megabytes per second | |
“MFS” | Mobile financial services | |
“MHz” | Mega hertz: the hertz is a unit of frequency of one cycle per second. A mega hertz refers to a frequency of one million hertz | |
“MMS” | Multimedia messaging service: an evolution of SMS services that, in addition to text messages, offer several types of multimedia contents such as images, audio and video-clips | |
“MNP” | Mobile number portability: a service, recently approved by the BTRC in Bangladesh, which allows customers to keep their mobile number when switching between mobile operators. The BTRC directive, instructing mobile telecommunications operators to make this service available to customers in Bangladesh, was approved by the BTRC on May 6, 2013 | |
“Mobile operator” | Provider of telecommunications services using the range of radio frequencies assigned to it | |
“MOU” | Minutes of use | |
“MPLS” | Multiprotocol label switching | |
“MSAN” | Multi-service access nodes | |
“MTR” | Mobile termination rates | |
“Multimedia” | Communications using any combination of different media and which may comprise text, audio, music, images, animation and video | |
“MVNO” | Mobile virtual network operator |
“OTT” | Over-the-top. Refers to content service providers such as Google and Facebook | |
“PBX” | Private branch exchange | |
“Penetration rate” | This is a measure of access to telecommunications, normally calculated by dividing the number of customers to a particular service by the population to whom it is available and multiplying by 100. It is also referred to as teledensity (for fixed-line networks) or mobile density (for cellular networks) | |
“Prepaid” | Mobile telephony service paid for in advance by the customer | |
“Postpaid” | Mobile telephony service paid for after usage by the customer has occurred | |
“Protocol” | The standard communication rules between two computers or within a computer network. Two computers using the same protocol can exchange data. The internet is based on a series of protocols, for example www is based on http protocol. The most popular is IP, Internet Protocol, which is a data transfer protocol | |
“PSTN” | Public switched telephone network: the circuit-switched public telephone network | |
“RBT” | Customized ring back tones | |
“REF” | Radio electronic facilities | |
“RIO” | Reference interconnection offers | |
“Roam” or “roaming” | The ability to make and receive calls on the same mobile phone even when travelling outside the area covered by the “home” network operator | |
“SaaS” | Software as a service | |
“SDH” | Synchronous digital hierarchy | |
“SIM” or “SIM card” | Customer identity module card: magnetic cards with a memory for data storage and software applications | |
“SME” | Small- and medium-size enterprise market which consists of businesses having between 3 and 50 employees | |
“SMS” | Short message service: a protocol that uses the signaling channel to transmit text messages up to 160 characters long | |
“SOHO” | Small office/home office | |
“TDD” | Time division duplex | |
“ULL” | Unbundled local loop | |
“UMTS” | Universal Mobile Telecommunications System | |
“USB” | Universal serial bus | |
“Value Added Services” or “VAS” | These are services that provide a higher level of functionality than those offered by basic transmission services made available by a telecommunications network for transferring information via terminals | |
“VoIP” | Voice over IP: digital technology enabling the transmission of voice packages via the internet, intranet, extranet and VNP networks. The packets are carried according to H.323 specifications, that is to say the ITU standard forming the basis for data, audio, video and communications services over IP type networks | |
“VPN” | Virtual private network | |
“VSAT” | Very small aperture terminals, which are two-way satellite ground stations used to transmit data | |
“WBA” | Wholesale broadband access | |
“WiMax” | Worldwide interoperability for microwave access communication standard | |
“WLL” | Wireless local loop | |
“WLR” | Wholesale line rental | |
“xDSL” | All types of DSL |
Regulatory bodies |
• | information technology, including the use of information technology in public resources and promotion of access to such resources; |
• | telecommunications, including the allocation and conversion of the radio frequency spectrum, and postal communications; |
• | mass media, including electronic media, development of the internet, television and radio broadcasting (including developments based on digital technology), and new related technologies; |
• | publishing, printing, and distribution of printed media; |
• | personal data processing, management over specified state property and provision of public services in the area of information technology including organization public information resources and access to it; and |
• | national policy and legal regulation relating to protection of children from information harmful to their health or development. |
Regulatory framework |
• | license communications service providers; |
• | allocate radio frequencies; |
• | certify telecommunications equipment; |
• | allocate numbering resources; |
• | ensure fair competition and fair pricing; |
• | conduct oversight of operators’ compliance with the terms of their licenses and Russian law; and |
• | ensure stability, security and functional integrity of the internet and public communication. |
Licenses |
Mobile Termination Rates |
Significant Market Power |
Mobile Number Portability |
Data Protection |
Other |
• | duties related to maintaining the functioning and security of communication lines crossing the state border of the Russian Federation; |
• | rules of communication network management in the event of threats to the stable, safe and integral operation of the Russian internet; |
• | rules restricting access to the information distributed via the internet; |
• | requirements to ensure the installation on communication networks the technical means to counteract threats to equipment and information control equipment; and |
• | the use of a national domain system. |
Sanctions regimes imposed against Russia |
Regulatory bodies |
Licenses |
Mobile Termination Rates |
Significant Market Power |
• | obtain prior approvals from the PTA for the launch of class value added services and any change in prices; |
• | provide, on a first-come, first-served basis, national roaming services and infrastructure sharing, meaning SMP operators will not be allowed to discriminate among operators; |
• | pay MTRs as determined by the PTA (instead of the mutually agreed upon MTR paid by non-SMP licensees); and |
• | offer infrastructure sharing. |
Mobile Number Portability |
Data Protection |
Other |
Regulatory bodies |
Regulatory framework |
Licenses |
Retail market regulation |
Significant Market Power |
Mobile Termination Rates |
Mobile Number Portability |
Data Protection |
Other |
Regulatory bodies |
Regulatory framework |
Licenses |
Mobile Termination Rates |
Significant Market Power |
Mobile Number Portability |
Data Protection |
Other |
Regulatory bodies |
Regulatory framework |
Licenses |
Mobile Termination Rates |
Significant Market Power |
Mobile Number Portability |
Data Protection |
Other |
Regulatory bodies |
Regulatory framework |
Licenses |
Mobile Termination Rates |
Significant Market Power |
Mobile Number Portability |
Data Protection |
Other |
• | From November 2019, IMEI registration can be processed manually only through the IMEI registration system. |
• | From November to December 2019, registration was available free of charge via the internet, SMS and USSD; and subsequently IMEI registration is on a paid basis, with payments being made through payment systems, which require a bank card, or made at banks offices. |
Regulatory bodies |
Regulatory framework |
Licenses |
Mobile Termination Rates |
Significant Market Power |
Mobile Number Portability |
Data Protection |
SIGNIFICANT ACCOUNTING POLICIES THAT RELATE TO THE CONSOLIDATED FINANCIAL STATEMENTS AS A WHOLE (Policies) |
12 Months Ended | ||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||
Significant Accounting Policies That Relate To The Consolidated Financial Statements As A Whole | |||||||||||||||||||||||||||||
Revenue from contracts with customers | Revenue from contracts with customers Service revenue Service revenue includes revenue from airtime charges from contract and prepaid customers, monthly contract fees, interconnect revenue, roaming charges and charges for value added services (“VAS”). VAS includes short messages, multimedia messages, caller number identification, call waiting, data transmission, mobile internet, downloadable content, mobile finance services, machine-to-machine and other services. The content revenue relating to VAS is presented net of related costs when the Company acts as an agent of the content providers and gross when the Company acts as the primary obligor of the transaction. Revenue for services with a fixed term, including fixed-term tariff plans and monthly subscriptions, is recognized on a straight-line basis over time. For pay-as-you-use plans, in which the customer is charged based on actual usage, revenue is recognized on a usage basis. Some tariff plans allow customers to rollover unused services to the following period. For such tariff plans, revenue is generally recognized on a usage basis. For contracts which include multiple service components (such as voice, text, data), revenue is allocated based on stand-alone selling price. The stand-alone selling price for these services is usually determined with reference to the price charged per service under a pay-as-you-use plan to similar customers. Upfront fees, including activation or connection fees, are recognized on a straight-line basis over the contract term. For contracts with an indefinite term (for example, prepaid contracts), revenue from upfront fees is recognized over the average customer life. Revenue from other operators, including interconnect and roaming charges, is recognized based on the price specified in the contract, net of any estimated retrospective volume discounts. Accumulated experience is used to estimate and provide for the discounts. All service revenue is recognized over time. Sale of equipment and accessories Equipment and accessories are usually sold to customers on a stand-alone basis, or together with service bundles. Where sold together with service bundles, revenue is allocated pro-rata, based on the stand-alone selling price of the equipment and the service bundle. The vast majority of equipment and accessories sales pertain to mobile handsets and accessories. Revenue for mobile handsets and accessories is recognized when the equipment is sold to a customer, or, if sold via an intermediary, when the intermediary has taken control of the device and the intermediary has no remaining right of return. Revenue for fixed-line equipment is not recognized until installation and testing of such equipment are completed and the equipment is accepted by the customer. All revenue from sale of equipment and accessories is recognized at a point in time. |
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Contract balances | Contract balances Receivables and contracts assets mostly relate to amounts due from other operators and postpaid customers. Contract assets, often referred to as ‘Accrued receivables,’ are transferred to Receivables when the rights become unconditional, which usually occurs when the Group issues an invoice to the customer. Contract liabilities, often referred to as ‘Deferred revenue’, relate primarily to non-refundable cash received from prepaid customers for fixed-term tariff plans or pay-as-you-use tariff plans. Contract liabilities are presented as ‘Long-term deferred revenue’, ‘Short-term deferred revenue’ and ‘Customer advances’ in Note 7. All current contract liabilities outstanding at the beginning of the year have been recognized as revenue during the year. |
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Customer acquisition costs | Customer acquisition costs Certain incremental costs incurred in acquiring a contract with a customer (“customer acquisition costs”), are deferred in the consolidated statement of financial position, within 'Other assets' (see Note 7). Such costs generally relate to commissions paid to third-party dealers and are amortized on a straight-line basis over the average customer life, within ‘Selling, general and administrative expenses’. The Group applies the practical expedient available for customer acquisition costs for which the amortization would have been shorter than 12 months. Such costs relate primarily to commissions paid to third-parties upon top-up of prepaid credit by customers and sale of top-up cards. Customer associated costs Customer associated costs relate primarily to commissions paid to third-party dealers and marketing expenses. Certain dealer commissions are initially capitalized in the consolidated statement of financial position and subsequently amortized within "Customer associated costs", see Note 3 for further details. |
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Trade and other receivables | Trade and other receivables Trade and other receivables are measured at amortized cost and include invoiced amounts less appropriate allowances for estimated uncollectible amounts. |
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Expected credit losses | Expected credit losses The expected credit loss allowance (ECL) is recognized for all receivables measured at amortized cost at each reporting date. This means that an allowance for doubtful debt is recognized for all receivables even though there may not be objective evidence that the trade receivable has been impaired. VEON applies the simplified approach (i.e. provision matrix) for calculating a lifetime ECL for its trade and other receivables, including unbilled receivables (contract assets). The provision matrix is based on the historical credit loss experience over the life of the trade receivables and is adjusted for forward-looking estimates. Forward looking estimates include macro-economic factors such as GDP (for receivables due from legal entities) and unemployment rates (for receivables due from individual customers). The provision matrix is reviewed on a quarterly basis. |
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Provisions | Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are discounted using a current pre-tax rate if the time value of money is significant. Contingent liabilities are possible obligations arising from past events, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. |
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Contingent liabilities | SOURCE OF ESTIMATION UNCERTAINTY The Group is involved in various legal proceedings, disputes and claims, including regulatory discussions related to the Group’s business, licenses, tax positions and investments, and the outcomes of these are subject to significant uncertainty. Management evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Unanticipated events or changes in these factors may require the Group to increase or decrease the amount recorded for a matter that has not been previously recorded because it was not considered probable. |
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Income taxes | Income taxes Income tax expense represents the aggregate amount determined on the profit for the period based on current tax and deferred tax. In cases where the tax relates to items that are charged to other comprehensive income or directly to equity, the tax is also charged respectively to other comprehensive income or directly to equity. |
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Uncertain tax positions | Uncertain tax positions The Group’s policy is to comply with the applicable tax regulations in the jurisdictions in which its operations are subject to income taxes. The Group’s estimates of current income tax expense and liabilities are calculated assuming that all tax computations filed by the Company’s subsidiaries will be subject to a review or audit by the relevant tax authorities. The Company and the relevant tax authorities may have different interpretations of how regulations should be applied to actual transactions (refer below for details regarding risks and uncertainties). |
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Deferred taxation | Deferred taxation Deferred taxes are recognized using the liability method and thus are computed as the taxes recoverable or payable in future periods in respect of deductible or taxable temporary differences between the tax bases of assets and liabilities and their carrying amounts in the Company’s financial statements. |
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Property and equipment | Property and equipment is stated at cost, net of any accumulated depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. The useful of life of VEON's assets generally fall within the following ranges:
Each asset’s residual value, useful life and method of depreciation is reviewed at the end of each financial year and adjusted prospectively, if necessary. |
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Intangible assets | Intangible assets acquired separately are carried at cost less accumulated amortization and impairment losses. Intangible assets with a finite useful life are generally amortized with the straight-line method over the estimated useful life of the intangible asset. The amortization period and the amortization method for intangible assets with finite useful lives are reviewed at least annually. |
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Goodwill | Goodwill is recognized for the future economic benefits arising from net assets acquired that are not individually identified and separately recognized. Goodwill is not amortized but is tested for impairment annually and as necessary when circumstances indicate that the carrying value may be impaired, see Note 11 for further details. |
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Control over subsidiaries | Control over subsidiaries Subsidiaries, which are those entities over which the Company is deemed to have control, are consolidated. In certain circumstances, significant judgment is required to assess if the Company is deemed to have control over entities where the Company’s ownership interest does not exceed 50%. The Group has concluded that it controls Omnium Telecom Algérie S.p.A and Optimum Telecom Algeria S.p.A even though its subsidiary, Global Telecom Holding S.A.E. owned less than 50% of the ordinary shares. This is because the Company can exercise operational control through terms of a shareholders’ agreement. |
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Put options over non-controlling interest | Put options over non-controlling interest Put options over non-controlling interest of a subsidiary are accounted for as financial liabilities in the Company’s consolidated financial statements. The put-option redemption liability is measured at the discounted redemption amount. Interest over the put-option redemption liability will accrue in line with the effective interest rate method, until the options have been exercised or are expired. |
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Derivative contracts | Derivative contracts VEON enters into derivative contracts, including swaps and forward contracts, to manage certain foreign currency and interest rate exposures. Any derivative instruments for which no hedge accounting is applied are recorded at fair value with any fair value changes recognized directly in profit or loss. Although some of the derivatives entered into by the Company have not been designated in hedge accounting relationships, they act as economic hedges and offset the underlying transactions when they occur. |
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Hedges of a net investment | Hedges of a net investment The Company applies net investment hedge accounting to mitigate foreign currency translation risk related to the Company’s investments in foreign operations. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognized in other comprehensive income within the “Foreign currency translation” line item. Where the hedging instrument’s foreign currency retranslation is greater (in absolute terms) than that of the hedged item, the excess amount is recorded in profit or loss as ineffectiveness. The gain or loss on the hedging instrument relating to the effective portion of the hedge that has been recognized in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment on the disposal or partial disposal of the foreign operation. Cash flows arising from derivative instruments for which hedge accounting is applied are reported in the statement of cash flows within the line item where the underlying cash flows of the hedged item are recorded. |
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Fair value of financial instruments | Fair value of financial instruments All financial assets and liabilities are measured at amortized cost, except those which are measured at fair value as presented within this Note. Where the fair value of financial assets and liabilities recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques, including discounted cash flows models. The inputs to these models are taken from observable markets, but when this is not possible, a degree of judgment is required in establishing fair values. The judgments include considerations regarding inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. |
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Measurement of lease liabilities | Measurement of lease liabilities Lease liabilities are measured upon initial recognition at the present value of the future lease and related fixed services payments over the lease term, discounted with the country specific incremental borrowing rate as the rate implicit in the lease is generally not available. Subsequently lease liabilities are measured at amortized cost using the effective interest rate method. A significant portion of the lease contracts included within Company’s lease portfolio includes lease contracts which are extendable through mutual agreement between VEON and the lessor, or lease contracts which are cancelable by the Company immediately or on short notice. The Company includes these cancelable future lease periods within the lease term, which increases the future lease payments used in determining the lease liability upon initial recognition. VEON's determination of the lease term is based on facts and circumstances related to the underlying leased asset and lease contracts. |
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Basis of preparation | BASIS OF PREPARATION These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, effective at the time of preparing the consolidated financial statements and applied by VEON. The consolidated income statement has been presented based on the nature of the expense, other than ‘Selling, general and administrative expenses’, which has been presented based on the function of the expense. The consolidated financial statements have been prepared on a historical cost basis, unless otherwise disclosed. |
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Basis of consolidation | BASIS OF CONSOLIDATION The consolidated financial statements comprise the financial statements of the Company and its subsidiaries. Subsidiaries are all entities (including structured entities) over which the Company has control. Please refer to Note 14 for a list of significant subsidiaries. Intercompany transactions, balances and unrealized gains or losses on transactions between Group companies are eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group’s accounting policies. When the Group ceases to consolidate a subsidiary due to loss of control, the related subsidiary’s assets (including goodwill), liabilities, non-controlling interest and other components of equity are de-recognized. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss. Any consideration received is recognized at fair value, and any investment retained is re-measured to its fair value, and this fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest. Any resultant gain or loss is recognized in the income statement. |
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Foreign currency translation | FOREIGN CURRENCY TRANSLATION The consolidated financial statements of the Group are presented in U.S. dollars. Each entity in the Group determines its own functional currency and amounts included in the financial statements of each entity are measured using that functional currency. Upon consolidation, the assets and liabilities measured in the functional currency are translated into U.S. dollars at exchange rates prevailing on the balance sheet date; whereas income and expenses are generally translated into U.S. dollars at historical monthly average exchange rates. Foreign currency translation adjustments resulting from the process of translating financial statements into U.S. dollars are reported in other comprehensive income and accumulated within a separate component of equity. |
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Changes in accounting policies and disclosures, new standards, interpretations, and amendments not yet adopted by the group | The Company, as a lessee, recognizes a right-of-use asset and a lease liability on the lease commencement date. Upon initial recognition, the right of use asset is measured as the amount equal to initially measure lease liability adjusted for lease prepayments, initial direct cost, lease incentives and the discounted estimated asset retirement obligation. Subsequently the right of use assets is measured at cost net of any accumulated depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the shorter estimated useful lives of the right-of-use assets or the lease term. The lease liability was measured upon initial recognition at the present value of the future lease and related fixed services payments over the lease term, discounted with the country specific incremental borrowing rate. Subsequently lease liabilities are measured at amortized cost using the effective interest rate method. Right-of-use assets and lease liabilities will be remeasured subsequently if one of the following events occurs:
Leases of non-core assets and not related to the main operating activities of the Group, which are short-term in nature (less than 12 months including extension options) and leases of low-value items are expensed in the income statement as incurred. Transition The Company adopted IFRS 16 on the date the standard becomes effective, January 1, 2019. The Group adopted the standard using the modified retrospective approach. This means that the cumulative impact of the adoption was recognized in retained earnings as of January 1, 2019 and that comparatives were not restated. The Group used the following practical expedients when adopting IFRS 16 on its effective date:
The weighted-average incremental rate applied to lease liabilities recognized on January 1, 2019 was 9.62%. Carrying values of property and equipment and financial liabilities related to finance leases as of December 31, 2018 were reclassified to right-of-use assets and lease liabilities, respectively on January 1, 2019. These carrying values related to finance leases were not remeasured at the transition date. Significant judgments upon adoption IFRS 16 IFRS 16 requires the Company to assess the lease term as the non-cancelable lease term in line with the lease contract together with the period for which the Company has extension options which the Company is reasonably certain to exercise and the periods for which the Company has termination options for which the Company is not reasonably certain to exercise those termination options. A significant portion of the lease contracts included within Company’s lease portfolio includes lease contracts which are extendable through mutual agreement between VEON and the lessor or lease contracts which are cancelable by the Company on immediately or on short notice. In assessing the lease term for the adoption of IFRS 16, the Company concluded that these cancelable future lease periods should be included within the lease term, which represents an increase to the future lease payments used in determining the lease liability upon initial recognition. The reasonably certain period used to determine the lease term is based on facts and circumstances related to the underlying leased asset and lease contracts. NEW STANDARDS AND INTERPRETATIONS Not yet adopted by the Group Certain new accounting standards and interpretations have been published that are not mandatory for December 31, 2019 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on VEON financial statements in current or future reporting periods or on foreseeable future transactions. Adopted in 2019 IFRIC 23 ‘Uncertainty over income tax treatments’ The interpretation clarifies the application of recognition and measurement requirements in IAS 12 ‘Income Taxes’ when there is uncertainty over income tax treatments. The Group has assessed the impact of IFRIC 23, which was not material to the financial statements of the Group upon adoption in 2019. IFRS 16 ‘Leases’ IFRS 16 replaced IAS 17 Leases, the former lease accounting standard and became effective on January 1, 2019. Under the new lease standard, assets leased by the Company are being recognized on the statement of financial position of the Company with a corresponding liability. |
OTHER NON-OPERATING GAIN / (LOSS) (Tables) |
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Schedule of other non-operating gains / (losses) | Other non-operating gains / (losses) consisted of the following for the years ended December 31:
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Label | Element | Value | ||
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Cumulative Effect Of New Accounting Principle In Period Of Adoption | vip_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 57,000,000 | ||
Cumulative Effect Of New Accounting Principle In Period Of Adoption | vip_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (4,000,000) | ||
Liabilities arising from financing activities | ifrs-full_LiabilitiesArisingFromFinancingActivities | $ 9,365,000,000 | ||
Issued capital [member] | ||||
Number of shares outstanding | ifrs-full_NumberOfSharesOutstanding | 1,749,127,404 | ||
Number of shares outstanding | ifrs-full_NumberOfSharesOutstanding | 1,749,127,404 | ||
Equity | ifrs-full_Equity | $ 2,000,000 | ||
Equity | ifrs-full_Equity | 2,000,000 | ||
Equity attributable to owners of parent [member] | ||||
Cumulative Effect Of New Accounting Principle In Period Of Adoption | vip_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 46,000,000 | ||
Cumulative Effect Of New Accounting Principle In Period Of Adoption | vip_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,000,000) | ||
Equity | ifrs-full_Equity | 4,377,000,000 | ||
Equity | ifrs-full_Equity | 3,667,000,000 | ||
Share premium [member] | ||||
Equity | ifrs-full_Equity | 12,753,000,000 | ||
Equity | ifrs-full_Equity | 12,753,000,000 | ||
Capital reserve [member] | ||||
Equity | ifrs-full_Equity | 729,000,000 | ||
Equity | ifrs-full_Equity | 743,000,000 | ||
Reserve of exchange differences on translation [member] | ||||
Equity | ifrs-full_Equity | (7,667,000,000) | ||
Equity | ifrs-full_Equity | (8,416,000,000) | ||
Retained earnings [member] | ||||
Cumulative Effect Of New Accounting Principle In Period Of Adoption | vip_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 46,000,000 | [1] | |
Cumulative Effect Of New Accounting Principle In Period Of Adoption | vip_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (3,000,000) | [1] | |
Equity | ifrs-full_Equity | (1,440,000,000) | [1] | |
Equity | ifrs-full_Equity | (1,415,000,000) | [1] | |
Non-controlling interests [member] | ||||
Cumulative Effect Of New Accounting Principle In Period Of Adoption | vip_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 11,000,000 | ||
Cumulative Effect Of New Accounting Principle In Period Of Adoption | vip_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (1,000,000) | ||
Equity | ifrs-full_Equity | (430,000,000) | ||
Equity | ifrs-full_Equity | (892,000,000) | ||
Office equipment [member] | ||||
Right-of-use assets | ifrs-full_RightofuseAssets | 7,000,000 | ||
Land and buildings [member] | ||||
Right-of-use assets | ifrs-full_RightofuseAssets | 415,000,000 | ||
Communication and network equipment [member] | ||||
Right-of-use assets | ifrs-full_RightofuseAssets | 1,601,000,000 | ||
Lease liabilities [member] | ||||
Liabilities arising from financing activities | ifrs-full_LiabilitiesArisingFromFinancingActivities | 1,999,000,000 | ||
Bank Loans And Bonds Principal [Member] | ||||
Liabilities arising from financing activities | ifrs-full_LiabilitiesArisingFromFinancingActivities | $ 7,366,000,000 | ||
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OTHER ASSETS AND LIABILITIES |
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OTHER ASSETS AND LIABILITIES | OTHER ASSETS AND LIABILITIES Other assets consisted of the following items as of December 31:
* Certain comparative amounts have been reclassified to conform to the current period presentation, refer to Note 23 for further details. Other liabilities consisted of the following items as of December 31:
* Certain comparative amounts have been reclassified to conform to the current period presentation, refer to Note 23 for further details. |
OPERATING REVENUE |
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Revenue [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPERATING REVENUE | OPERATING REVENUE VEON generates revenue from the provision of voice, data and other telecommunication services through a range of wireless, fixed and broadband Internet services, as well as selling equipment and accessories. Products and services may be sold separately or in bundled packages. Revenue from contracts with customers The following table provides a breakdown of revenue from contracts with customers by mobile and fixed line for the years ended December 31:
* Includes other revenue of US$6 for 2019 (2018: nil, 2017: nil) Assets and liabilities arising from contracts with customers The following table provides a breakdown of contract balances and capitalized customer acquisition costs.
ACCOUNTING POLICIES Revenue from contracts with customers Service revenue Service revenue includes revenue from airtime charges from contract and prepaid customers, monthly contract fees, interconnect revenue, roaming charges and charges for value added services (“VAS”). VAS includes short messages, multimedia messages, caller number identification, call waiting, data transmission, mobile internet, downloadable content, mobile finance services, machine-to-machine and other services. The content revenue relating to VAS is presented net of related costs when the Company acts as an agent of the content providers and gross when the Company acts as the primary obligor of the transaction. Revenue for services with a fixed term, including fixed-term tariff plans and monthly subscriptions, is recognized on a straight-line basis over time. For pay-as-you-use plans, in which the customer is charged based on actual usage, revenue is recognized on a usage basis. Some tariff plans allow customers to rollover unused services to the following period. For such tariff plans, revenue is generally recognized on a usage basis. For contracts which include multiple service components (such as voice, text, data), revenue is allocated based on stand-alone selling price. The stand-alone selling price for these services is usually determined with reference to the price charged per service under a pay-as-you-use plan to similar customers. Upfront fees, including activation or connection fees, are recognized on a straight-line basis over the contract term. For contracts with an indefinite term (for example, prepaid contracts), revenue from upfront fees is recognized over the average customer life. Revenue from other operators, including interconnect and roaming charges, is recognized based on the price specified in the contract, net of any estimated retrospective volume discounts. Accumulated experience is used to estimate and provide for the discounts. All service revenue is recognized over time. Sale of equipment and accessories Equipment and accessories are usually sold to customers on a stand-alone basis, or together with service bundles. Where sold together with service bundles, revenue is allocated pro-rata, based on the stand-alone selling price of the equipment and the service bundle. The vast majority of equipment and accessories sales pertain to mobile handsets and accessories. Revenue for mobile handsets and accessories is recognized when the equipment is sold to a customer, or, if sold via an intermediary, when the intermediary has taken control of the device and the intermediary has no remaining right of return. Revenue for fixed-line equipment is not recognized until installation and testing of such equipment are completed and the equipment is accepted by the customer. All revenue from sale of equipment and accessories is recognized at a point in time. Contract balances Receivables and contracts assets mostly relate to amounts due from other operators and postpaid customers. Contract assets, often referred to as ‘Accrued receivables,’ are transferred to Receivables when the rights become unconditional, which usually occurs when the Group issues an invoice to the customer. Contract liabilities, often referred to as ‘Deferred revenue’, relate primarily to non-refundable cash received from prepaid customers for fixed-term tariff plans or pay-as-you-use tariff plans. Contract liabilities are presented as ‘Long-term deferred revenue’, ‘Short-term deferred revenue’ and ‘Customer advances’ in Note 7. All current contract liabilities outstanding at the beginning of the year have been recognized as revenue during the year. Customer acquisition costs Certain incremental costs incurred in acquiring a contract with a customer (“customer acquisition costs”), are deferred in the consolidated statement of financial position, within 'Other assets' (see Note 7). Such costs generally relate to commissions paid to third-party dealers and are amortized on a straight-line basis over the average customer life, within ‘Selling, general and administrative expenses’. The Group applies the practical expedient available for customer acquisition costs for which the amortization would have been shorter than 12 months. Such costs relate primarily to commissions paid to third-parties upon top-up of prepaid credit by customers and sale of top-up cards. SOURCE OF ESTIMATION UNCERTAINTY Average customer life Management estimates the average customer life for revenue (such as upfront fees) from contracts with an indefinite term and for customer acquisition costs. The average customer life is calculated based on historical data, specifically churn rates for different customer segments (such as mobile and fixed line, prepaid and postpaid). |
IMPAIRMENT OF ASSETS |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Disclosure of impairment loss and reversal of impairment loss [abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
IMPAIRMENT OF ASSETS | IMPAIRMENT OF ASSETS Property and equipment and intangible assets are tested regularly for impairment. The Company assesses, at the end of each reporting period, whether there exist any indicators that an asset may be impaired (i.e. asset becoming idle, damaged or no longer in use). If there are such indicators, the Company estimates the recoverable amount of the asset. Impairment losses of continuing operations are recognized in the income statement in a separate line item. Goodwill is tested for impairment annually (at October 1) or when circumstances indicate the carrying value may be impaired. The Company’s impairment test is primarily based on fair value less cost of disposal calculations (Level 3 in the fair value hierarchy) using a discounted cash flow model, based on cash flow projections from business plans prepared by management. The Company considers the relationship between its market capitalization and its book value, as well as weighted average cost of capital and the quarterly financial performances of each cash-generating units (“CGU”) when reviewing for indicators of impairment in interim periods. Impairment losses in 2019 During the third quarter of 2019, due to operational underperformance of its operations in Kyrgyzstan, the Company revised its previous estimates and assumptions regarding the future cash flows of the Kyrgyzstan CGU. Based on a recoverable value of US$42, the Company recorded an impairment of US$90 against the carrying value of the CGU. The impairment loss for Kyrgyzstan was allocated first to the existing carrying value of goodwill (US$54) and then subsequently to property and equipment (US$33) and intangible assets (US$3), based on relative carrying values. Additionally, in regard with the Company’s commitment to network modernization, the Company continuously re-evaluates the plans for its existing network, primarily with respect to equipment purchased but not installed, and consequently recorded an impairment loss of US$18. Impairment losses in 2018 and 2017 Due to operational performance of operating companies, in 2018 and 2017, respectively, the Company recorded an impairment of US$858 and US$66 as shown below. Impairment losses were allocated first to the existing carrying value of goodwill, and then subsequently to property and equipment and intangible assets based on relative carrying values.
KEY ASSUMPTIONS The recoverable amounts of CGUs have been determined based on fair value less costs of disposal calculations, using cash flow projections from business plans prepared by management. The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company’s CGUs. These budgets and forecast calculations are prepared for a period of five years. A long-term growth rate is applied to project future cash flows after the fifth year. The table below shows key assumptions used in fair value less costs of disposal calculations.
SENSITIVITY TO CHANGES IN ASSUMPTIONS The following table illustrates the CGU with limited headroom and potential impairment that would need to be recorded if certain key parameters would adversely change by one percentage point within both the explicit forecast and terminal periods. Any additional adverse changes in the key parameters by more than one percentage point would increase the amount of impairment exposure approximately proportionally.
SOURCE OF ESTIMATION UNCERTAINTY The Group has significant investments in property and equipment, intangible assets, goodwill and other investments. Estimating recoverable amounts of assets and CGUs must, in part, be based on management’s evaluations, including the determination of the appropriate CGUs, the relevant discount rate, estimation of future performance, the revenue-generating capacity of assets, timing and amount of future purchases of property and equipment, assumptions of future market conditions and the long-term growth rate into perpetuity (terminal value). In doing this, management needs to assume a market participant perspective. Changing the assumptions selected by management, in particular, the discount rate and growth rate assumptions used to estimate the recoverable amounts of assets, could significantly impact the Group’s impairment evaluation and hence results. A significant part of the Group’s operations is in countries with emerging markets. The political and economic situation in these countries may change rapidly and recession may potentially have a significant impact on these countries. On-going recessionary effects in the world economy and increased macroeconomic risks impact our assessment of cash flow forecasts and the discount rates applied. There are significant variations between different markets with respect to growth, mobile penetration, average revenue per user (“ARPU”), market share and similar parameters, resulting in differences in operating margins. The future development of operating margins is important in the Group’s impairment assessments, and the long-term estimates of these margins are highly uncertain. This is particularly the case for emerging markets that are not yet in a mature phase. |
CONDENSED SEPARATE FINANCIAL INFORMATION OF VEON - Condensed Income Statement (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Condensed Income Statements, Captions [Line Items] | |||
Selling, general and administrative expenses | $ (2,965) | $ (3,697) | $ (3,748) |
Other operating gains | 350 | 0 | 0 |
Operating (loss) / profit | 2,019 | 554 | 1,467 |
Income tax | (498) | (369) | (472) |
Total non-operating income and expenses | 21 | (68) | (97) |
Veon Ltd. | |||
Condensed Income Statements, Captions [Line Items] | |||
Selling, general and administrative expenses | (160) | (240) | (177) |
Other operating gains | 350 | 0 | 0 |
Recharged expenses to group companies | 21 | 47 | 60 |
Operating (loss) / profit | 211 | (193) | (117) |
Finance income and (costs) | 6 | 4 | 0 |
Share in result of subsidiaries after tax | 404 | 771 | (387) |
Income tax | 0 | 0 | (1) |
Total non-operating income and expenses | 410 | 775 | (388) |
Profit / (loss) for the year | $ 621 | $ 582 | $ (505) |
PROPERTY AND EQUIPMENT - Commitments (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Disclosure of capital commitments [line items] | ||
Total commitments | $ 696 | $ 437 |
Less than 1 year | ||
Disclosure of capital commitments [line items] | ||
Total commitments | 677 | 433 |
Between 1 and 5 years | ||
Disclosure of capital commitments [line items] | ||
Total commitments | $ 19 | $ 4 |
PROVISIONS AND CONTINGENT LIABILITIES - Contingent liabilities narrative (Details) ৳ in Millions, $ in Millions, $ in Billions |
5 Months Ended | 12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 20, 2017
USD ($)
|
Apr. 27, 2016
action
|
Aug. 13, 2015 |
May 18, 2015
USD ($)
card
|
Apr. 01, 2012
USD ($)
operator
card
|
Aug. 31, 2017
amendment
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2016
CAD ($)
|
Dec. 31, 2019
USD ($)
|
Jul. 05, 2019
GBP (£)
|
Dec. 31, 2018
USD ($)
|
Nov. 20, 2017
BDT (৳)
|
May 18, 2015
BDT (৳)
|
Apr. 01, 2012
BDT (৳)
|
|
Disclosure of other provisions [line items] | ||||||||||||||
Threshold value of other individual contingencies for disclosure | $ | $ 5 | |||||||||||||
Total value of all other individual contingencies above threshold other than amounts already disclosed | $ | 69 | $ 68 | ||||||||||||
VEON - Securities Class Action | ||||||||||||||
Disclosure of other provisions [line items] | ||||||||||||||
Number of class action lawsuits filed against the company | action | 2 | |||||||||||||
Catalyst | ||||||||||||||
Disclosure of other provisions [line items] | ||||||||||||||
Damages sought alleging breach of contract | $ 1,034 | $ 1.3 | ||||||||||||
VAT on Replacement SIMs | Banglalink Digital Communications Limited | ||||||||||||||
Disclosure of other provisions [line items] | ||||||||||||||
Legal provisions | $ | $ 11 | $ 11 | ||||||||||||
Dispute Concerning Sale of Telecel Global Limited [Member] | ||||||||||||||
Disclosure of other provisions [line items] | ||||||||||||||
Number of amendments to SPA | amendment | 3 | |||||||||||||
NBR | VAT on Replacement SIMs | Banglalink Digital Communications Limited | ||||||||||||||
Disclosure of other provisions [line items] | ||||||||||||||
Unpaid SIM tax | $ 94 | ৳ 7,740 | ||||||||||||
Number of random SIM cards purchased by NBR | 5 | |||||||||||||
Total number of SIM cards issued | 7,021,834 | |||||||||||||
Number of other operators that received notices | operator | 3 | |||||||||||||
Percentage of exposure of the original demand | 8.50% | |||||||||||||
Assessed SIM tax liability | $ 92 | ৳ 7,620 | ||||||||||||
LTU | VAT on Replacement SIMs | Banglalink Digital Communications Limited | ||||||||||||||
Disclosure of other provisions [line items] | ||||||||||||||
Unpaid SIM tax | $ 20 | ৳ 1,690 | ||||||||||||
Number of random SIM cards purchased by Review Committee | 1,200 | |||||||||||||
Percentage of incorrectly registered SIM cards | 4.83% | |||||||||||||
Number of SIM cards incorrectly issued | 6,887,633 | |||||||||||||
SIM tax payable on incorrectly issued SIM cards | $ 64 | ৳ 5,320 | ||||||||||||
Percentage of SIM tax deposited | 10.00% | 10.00% | ||||||||||||
Niel Natural Resources Investments S.A. | Dispute Concerning Sale of Telecel Global Limited [Member] | ||||||||||||||
Disclosure of other provisions [line items] | ||||||||||||||
Escrow deposit | £ | £ 250,000 |
SIGNIFICANT TRANSACTIONS - Sale of Italy Joint Venture (Details) € in Millions, $ in Millions |
1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2018
EUR (€)
|
Jul. 31, 2018 |
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
|
Disclosure of joint ventures [line items] | ||||||
Gain / (loss) on disposal of discontinued operations | $ 0 | $ 1,279 | $ 0 | |||
Italy Joint Venture | Discontinued operations | ||||||
Disclosure of joint ventures [line items] | ||||||
Proportion of ownership interest in joint venture | 50.00% | |||||
Cash consideration received | $ 2,830 | € 2,450 | ||||
Derecognition of assets classified as held for sale | (1,599) | |||||
Release cumulative share of other comprehensive income / (loss) of Italy Joint Venture | (31) | |||||
Release cumulative foreign currency translation reserve related to Italy Joint Venture | 79 | |||||
Gain / (loss) on disposal of discontinued operations | $ 1,279 |
IMPAIRMENT OF ASSETS - Sensitivity to changes in assumptions (Details) - Algeria $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Sensitivity to changes in assumptions | |
Amount by which unit's recoverable amount exceeds its carrying amount | $ 102 |
Reasonably possible 1% change in discount rate, amount | (45) |
Reasonably possible 1% change in discount rate, amount | (80) |
Reasonably possible 1% change in discount rate, amount | 0 |
Reasonably possible 1% change in average capital expenditure excluding licenses and right-of-use assets as percentage of revenue, amount | 0 |
Reasonably possible 1% change in terminal growth rate, amount | $ (5) |
INCOME TAXES - Reconciliation between statutory and effective income tax (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Effective income tax rate reconciliation, difference due to tax effects | |||
Netherlands corporate tax rate | 25.00% | ||
Profit / (loss) before tax from continuing operations | $ 1,181 | $ (248) | $ 328 |
Income tax benefit / (expense) at statutory tax rate (25.0%) | (295) | 62 | (82) |
Different tax rates in different jurisdictions | 20 | 89 | 84 |
Non-deductible expenses | (90) | (120) | (117) |
Non-taxable income | 5 | 49 | 35 |
Adjustments in respect of previous years | (49) | (39) | (52) |
Movements in recognized deferred tax assets | (13) | (354) | (166) |
Withholding taxes | (50) | 45 | (123) |
Uncertain tax positions | 6 | (17) | (24) |
Change in income tax rate | 1 | (6) | (10) |
Other | (33) | (78) | (17) |
Income tax benefit / (expense) | $ (498) | $ (369) | $ (472) |
Effective tax rate | 42.20% | (148.80%) | 143.90% |
INVESTMENTS, DEBT AND DERIVATIVES - Security deposits (Details) $ / spectrum_block in Millions, $ in Millions |
Jul. 22, 2019
USD ($)
MHz
$ / spectrum_block
|
Dec. 31, 2019
USD ($)
|
Sep. 30, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
---|---|---|---|---|
Disclosure of financial assets [line items] | ||||
Financial assets | $ 317 | $ 146 | ||
At amortized cost | ||||
Disclosure of financial assets [line items] | ||||
Financial assets | 272 | 48 | ||
Security deposits and cash collateral | At amortized cost | ||||
Disclosure of financial assets [line items] | ||||
Financial assets | $ 256 | $ 31 | ||
PTA License Renewal | ||||
Disclosure of financial assets [line items] | ||||
License renewal assessment, tax percentage | 13.00% | |||
PTA License Renewal | Security deposits and cash collateral | At amortized cost | ||||
Disclosure of financial assets [line items] | ||||
Financial assets | $ 225 | |||
PTA License Renewal | 900 MHz Spectrum | ||||
Disclosure of financial assets [line items] | ||||
License renewal assessment, amount per spectrum block | $ / spectrum_block | 40 | |||
Frequency bands | MHz | 900 | |||
License renewal assessment, total amount | $ 450 | |||
PTA License Renewal | 1800 MHz Spectrum | ||||
Disclosure of financial assets [line items] | ||||
License renewal assessment, amount per spectrum block | $ / spectrum_block | 30 | |||
Frequency bands | MHz | 1,800 |
INVESTMENTS, DEBT AND DERIVATIVES - New issuances (Details) |
1 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Apr. 30, 2019
USD ($)
|
Dec. 31, 2019 |
Oct. 31, 2019
USD ($)
|
Oct. 09, 2019
USD ($)
|
Jun. 30, 2019
PKR (₨)
|
May 31, 2019
USD ($)
|
|
Disclosure of detailed information about borrowings [line items] | |||||||
Interest rate | 4.00% | ||||||
Notes 4% | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Facility amount | $ 700,000,000 | $ 700,000,000 | |||||
Interest rate | 4.00% | ||||||
PKR 14,369 Loan 0.75% | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Facility amount | $ 92,000,000 | ₨ 14,369,000,000 | |||||
PKR 45,000 Loan 0.75% | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Facility amount | $ 287,000,000 | ₨ 45,000,000,000 | |||||
Loan 2.50% | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Facility amount | $ 300,000,000 | ||||||
Borrowings term | 12 months | ||||||
Borrowings extension option, term | 24 months | ||||||
Notes 8.63% | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Facility amount | $ 300,000,000 | ||||||
Interest rate | 8.63% | ||||||
6m KIBOR | Loan 0.75% | |||||||
Disclosure of detailed information about borrowings [line items] | |||||||
Borrowings term | 7 years | ||||||
Spread on interest rate basis | 0.75% | 0.75% | 0.75% |
GENERAL INFORMATION (Details) - USD ($) |
1 Months Ended | 6 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Aug. 31, 2019 |
Jun. 30, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Nov. 30, 2019 |
Oct. 31, 2019 |
Oct. 09, 2019 |
|
General information | ||||||||
Other operating gains | $ 350,000,000 | $ 0 | $ 0 | |||||
Interest rate | 4.00% | |||||||
Free Float percentage | 43.80% | 29.60% | 43.80% | 34.90% | ||||
GTH | ||||||||
General information | ||||||||
Number of shares acquired (in shares) | 1,914,322,110 | |||||||
Percentage of voting equity interests acquired | 40.55% | 41.00% | ||||||
Notes 4% | ||||||||
General information | ||||||||
Facility amount | $ 700,000,000 | $ 700,000,000 | ||||||
Interest rate | 4.00% | |||||||
Common shares | Telenor East Holding II AS (Telenor) | ||||||||
General information | ||||||||
Number of shares outstanding including treasury shares (in shares) | 157,000,000 | |||||||
Proportion of common and voting shares including proportion of treasury shares, in percentage | 8.90% | |||||||
Ericsson | ||||||||
General information | ||||||||
Other operating gains | $ 350,000,000 |
CASH AND CASH EQUIVALENTS (Details) - USD ($) |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|||
---|---|---|---|---|---|---|---|
Cash and cash equivalents [abstract] | |||||||
Cash and cash equivalents at banks and on hand | $ 932,000,000 | $ 756,000,000 | |||||
Cash equivalents with original maturity of less than three months | 318,000,000 | 1,052,000,000 | |||||
Cash and cash equivalents | 1,250,000,000 | 1,808,000,000 | [1] | ||||
Less overdrafts | (46,000,000) | (17,000,000) | |||||
Cash and cash equivalents, net of overdrafts, as presented in the consolidated statement of cash flows | 1,204,000,000 | 1,791,000,000 | $ 1,314,000,000 | $ 2,942,000,000 | |||
Restricted cash | 0 | 0 | |||||
Investments in money market funds | 155,000,000 | 349,000,000 | |||||
Overdrafts | $ 46,000,000 | $ 17,000,000 | |||||
|
DIVIDENDS PAID AND PROPOSED (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends Paid And Proposed | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of dividends | Following table provides an overview of the dividends announced by VEON for years 2019 and 2018:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of declared dividends paid or payable to non-controlling interests | During the 2019, 2018 and 2017 years, certain subsidiaries of the Company declared dividends, of which a portion was paid or payable to non-controlling interests.
|
TRADE AND OTHER RECEIVABLES - Detail of trade and other receivables (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|||
---|---|---|---|---|---|---|---|
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments [line items] | |||||||
Trade receivables | $ 610 | $ 545 | $ 629 | ||||
Other receivable, net of expected credit losses allowance | 18 | 32 | 126 | ||||
Total trade and other receivables | 628 | $ 516 | 577 | [1] | 755 | ||
Gross | |||||||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments [line items] | |||||||
Trade receivables | 786 | 716 | 798 | ||||
Expected credit losses | |||||||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments [line items] | |||||||
Trade receivables | $ (176) | $ (171) | $ (169) | ||||
|
Document and Entity Information |
12 Months Ended |
---|---|
Dec. 31, 2019
shares
| |
Document and Entity Information [Abstract] | |
Entity Registrant Name | VEON Ltd. |
Entity Central Index Key | 0001468091 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2019 |
Entity Emerging Growth Company | false |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Interactive Data Current | Yes |
Entity Common Stock, Shares Outstanding (in shares) | 1,756,731,135 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | FY |
Entity Shell Company | false |
Document Shell Company Report | false |
Document Transition Report | false |
Document Annual Report | true |
Document Registration Statement | false |
INVESTMENTS IN SUBSIDIARIES - Information about significant subsidiaries (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
VEON Amsterdam B.V. | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 100.00% |
VEON Holdings B.V. | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 100.00% |
PJSC VimpelCom | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 100.00% |
JSC “Kyivstar” | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 100.00% |
LLP “KaR-Tel” | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 75.00% | 75.00% |
LLC “Unitel” | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 100.00% |
LLC “VEON Georgia” | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 80.00% | 80.00% |
CJSC “VEON Armenia” | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 100.00% |
LLC “Sky Mobile” | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 50.10% | 50.10% |
VEON Luxembourg Holdings S.à r.l. | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 100.00% |
VEON Luxembourg Finance Holdings S.à r.l. | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 100.00% |
VEON Luxembourg Finance S.A. | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 100.00% |
Global Telecom Holding S.A.E | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 99.54% | 57.70% |
Omnium Telecom Algérie S.p.A. | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 45.40% | 26.30% |
Optimum Telecom Algeria S.p.A. | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 45.40% | 26.30% |
Pakistan Mobile Communications Limited | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 85.00% | 49.00% |
Banglalink Digital Communications Limited | ||
Investments in subsidiaries | ||
Equity interest held by the Group | 100.00% | 57.70% |
PROPERTY AND EQUIPMENT - Useful life of property and equipment (Details) |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
Minimum | Telecommunications equipment | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 3 years |
Minimum | Buildings and constructions | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 10 years |
Minimum | Office and other equipment | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 3 years |
Maximum | Telecommunications equipment | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 20 years |
Maximum | Buildings and constructions | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 50 years |
Maximum | Office and other equipment | |
Disclosure of detailed information about property, plant and equipment [line items] | |
Useful life | 10 years |
OPERATING REVENUE - Revenue (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | $ 8,863,000,000 | $ 9,086,000,000 | $ 9,474,000,000 |
Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 8,863,000,000 | 9,086,000,000 | 9,474,000,000 |
Russia | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 4,481,000,000 | 4,654,000,000 | 4,729,000,000 |
Pakistan | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 1,321,000,000 | 1,494,000,000 | 1,525,000,000 |
Ukraine | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 870,000,000 | 688,000,000 | 622,000,000 |
Other revenue | 6,000,000 | 0 | 0 |
Kazakhstan | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 486,000,000 | 441,000,000 | 416,000,000 |
Uzbekistan | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 258,000,000 | 315,000,000 | 513,000,000 |
Algeria | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 775,000,000 | 813,000,000 | 915,000,000 |
Bangladesh | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 537,000,000 | 521,000,000 | 574,000,000 |
Other and eliminations | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 135,000,000 | 160,000,000 | 180,000,000 |
HQ | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 0 | 0 | 0 |
Mobile | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 8,140,000,000 | 8,366,000,000 | 8,688,000,000 |
Mobile | Russia | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 3,938,000,000 | 4,085,000,000 | 4,053,000,000 |
Mobile | Pakistan | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 1,321,000,000 | 1,494,000,000 | 1,525,000,000 |
Mobile | Ukraine | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 818,000,000 | 644,000,000 | 581,000,000 |
Mobile | Kazakhstan | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 419,000,000 | 368,000,000 | 341,000,000 |
Mobile | Uzbekistan | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 256,000,000 | 313,000,000 | 510,000,000 |
Mobile | Algeria | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 775,000,000 | 813,000,000 | 915,000,000 |
Mobile | Bangladesh | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 537,000,000 | 521,000,000 | 574,000,000 |
Mobile | Other and eliminations | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 76,000,000 | 128,000,000 | 189,000,000 |
Mobile | HQ | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 0 | 0 | 0 |
Fixed | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 723,000,000 | 720,000,000 | 786,000,000 |
Fixed | Russia | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 543,000,000 | 569,000,000 | 676,000,000 |
Fixed | Pakistan | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 0 | 0 | 0 |
Fixed | Ukraine | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 52,000,000 | 44,000,000 | 41,000,000 |
Fixed | Kazakhstan | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 67,000,000 | 73,000,000 | 75,000,000 |
Fixed | Uzbekistan | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 2,000,000 | 2,000,000 | 3,000,000 |
Fixed | Algeria | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 0 | 0 | 0 |
Fixed | Bangladesh | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 0 | 0 | 0 |
Fixed | Other and eliminations | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | 59,000,000 | 32,000,000 | (9,000,000) |
Fixed | HQ | Reportable segments | |||
Revenue from rendering of telecommunication services [abstract] | |||
Total operating revenues | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Millions |
Total |
Total |
Issued capital |
Capital Surplus |
Other capital reserves |
Accumulated deficit |
[1] | Foreign currency translation |
Non-controlling interests |
|||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Number of shares outstanding at beginning of period (in shares) at Dec. 31, 2016 | 1,749,004,648 | |||||||||||||||
Equity at beginning of period at Dec. 31, 2016 | $ 6,043 | $ 5,960 | $ 2 | $ 12,753 | $ 753 | $ (439) | $ (7,109) | $ 83 | ||||||||
Profit / (loss) for the period | (534) | (505) | (505) | (29) | ||||||||||||
Other comprehensive income / (loss) | (656) | (576) | (18) | (558) | (80) | |||||||||||
Total comprehensive income / (loss) | (1,190) | (1,081) | (18) | (505) | (558) | (109) | ||||||||||
Dividends declared | (704) | (536) | (536) | (168) | ||||||||||||
Changes in ownership interest in a subsidiary that do not result in a loss of control | (259) | (12) | (12) | (247) | ||||||||||||
Share-based payment transactions (in shares) | 122,756 | |||||||||||||||
Reallocation to legal reserve in Algeria | 6 | (6) | ||||||||||||||
Number of shares outstanding at end of period (in shares) at Dec. 31, 2017 | 1,749,127,404 | |||||||||||||||
Equity at end of period at Dec. 31, 2017 | 3,890 | 4,331 | $ 2 | 12,753 | 729 | (1,486) | (7,667) | (441) | ||||||||
Profit / (loss) for the period | 362 | [2] | 582 | 582 | (220) | |||||||||||
Other comprehensive income / (loss) | (887) | [2] | (720) | 11 | 5 | (736) | (167) | |||||||||
Total comprehensive income / (loss) | (525) | [2] | (138) | 11 | 587 | (736) | (387) | |||||||||
Dividends declared | (602) | (509) | (509) | (93) | ||||||||||||
Other | (41) | (60) | 3 | (50) | (13) | 19 | ||||||||||
Number of shares outstanding at end of period (in shares) at Dec. 31, 2018 | 1,749,127,404 | |||||||||||||||
Equity at end of period at Dec. 31, 2018 | 2,779 | [3] | 3,670 | $ 2 | 12,753 | 743 | (1,412) | (8,416) | (891) | |||||||
Profit / (loss) for the period | 683 | 621 | 621 | 62 | ||||||||||||
Other comprehensive income / (loss) | 56 | 112 | 6 | 1 | 105 | (56) | ||||||||||
Total comprehensive income / (loss) | 739 | 733 | 6 | 622 | 105 | 6 | ||||||||||
Dividends declared | (633) | (525) | (525) | (108) | ||||||||||||
Changes in ownership interest in a subsidiary that do not result in a loss of control | (608) | (2,594) | (2,594) | 1,986 | ||||||||||||
Other | (53) | (55) | (42) | (12) | (1) | 2 | ||||||||||
Number of shares outstanding at end of period (in shares) at Dec. 31, 2019 | 1,749,127,404 | |||||||||||||||
Equity at end of period at Dec. 31, 2019 | $ 2,220 | $ 1,226 | $ 2 | $ 12,753 | $ (1,887) | $ (1,330) | $ (8,312) | $ 994 | ||||||||
|
INVESTMENTS IN SUBSIDIARIES - Summarized statement of cash flows (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Investments in subsidiaries | |||
Net operating cash flows | $ 2,949 | $ 2,515 | $ 2,475 |
Net investing cash flows | (1,888) | 1,997 | (3,016) |
Net financing cash flows | (1,639) | (3,916) | (733) |
Net foreign exchange difference | (9) | (119) | (354) |
Kar-Tel | |||
Investments in subsidiaries | |||
Net operating cash flows | 199 | 148 | 105 |
Net investing cash flows | (84) | (42) | (73) |
Net financing cash flows | (104) | (90) | (48) |
Net foreign exchange difference | 0 | (3) | 0 |
Net increase / (decrease) in cash equivalents | 11 | 13 | (16) |
Sky Mobile | |||
Investments in subsidiaries | |||
Net operating cash flows | 17 | 29 | 23 |
Net investing cash flows | (15) | (18) | (24) |
Net financing cash flows | (24) | 0 | 0 |
Net foreign exchange difference | 0 | 0 | 0 |
Net increase / (decrease) in cash equivalents | (22) | 11 | (1) |
GTH | |||
Investments in subsidiaries | |||
Net operating cash flows | 691 | 900 | 877 |
Net investing cash flows | (529) | (695) | (924) |
Net financing cash flows | (395) | (110) | (157) |
Net foreign exchange difference | (23) | (60) | (18) |
Net increase / (decrease) in cash equivalents | (256) | 35 | (222) |
OTA | |||
Investments in subsidiaries | |||
Net operating cash flows | 305 | 245 | 345 |
Net investing cash flows | (84) | (118) | (172) |
Net financing cash flows | (205) | (193) | (350) |
Net foreign exchange difference | (1) | (5) | (7) |
Net increase / (decrease) in cash equivalents | $ 15 | $ (71) | $ (184) |
OTHER ASSETS AND LIABILITIES - Other liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|||
---|---|---|---|---|---|---|
Other Assets And Liabilities | ||||||
Long-term deferred revenue (see Note 3) | $ 18 | $ 10 | ||||
Other liabilities | 15 | 43 | ||||
Total other non-current liabilities | 33 | $ 44 | 53 | [1] | ||
Taxes payable (non-income taxes) | 411 | 352 | ||||
Short-term deferred revenue (see Note 3) | 161 | 151 | ||||
Customer advances (see Note 3) | 64 | 200 | ||||
Other payments to authorities | 97 | 86 | ||||
Due to employees | 197 | 198 | ||||
Other liabilities | 82 | 79 | ||||
Total other current liabilities | $ 1,012 | $ 1,287 | $ 1,066 | [1] | ||
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SEGMENT INFORMATION |
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Disclosure of operating segments [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT INFORMATION | OPERATING ACTIVITIES OF THE GROUP SEGMENT INFORMATION Management analyzes the Company’s operating segments separately because of different economic environments and stages of development in different geographical areas, requiring different investment and marketing strategies. All the segments are grouped and analyzed as three main markets - our cornerstone, our growth engines and our frontier markets - representing the Company's strategy and capital allocation framework. Management evaluates the performance of the Company’s segments on a regular basis, primarily based on earnings before interest, tax, depreciation, amortization, impairment, gain / loss on disposals of non-current assets, other non-operating gains / losses and share of profit / loss of joint ventures and associates (“Adjusted EBITDA”) along with assessing the capital expenditures excluding certain costs such as those for telecommunication licenses and right-of-use assets (“CAPEX excl. licenses and ROU”). Management does not analyze assets or liabilities by reportable segments. As of January 1, 2019, the Company adopted the new accounting standard IFRS 16 Leases. Accordingly, operating lease expenses are no longer recorded in the income statement but are instead considered in recording a lease liability in the statement of financial position. The Company applied a modified retrospective approach, which means that prior period comparatives were not restated. Refer to Note 24 for more details. As a result, Adjusted EBITDA in 2019 is not comparable to Adjusted EBITDA in 2018 and 2017. As of December 31, 2019, management decided to include Kazakhstan as a separate reportable segment due to the increased impact of Kazakhstan operations on the overall business (previously presented within 'Other'). In addition, management decided to show the financial impact of HQ from operating companies. Comparative figures for 2018 and 2017 have been adjusted to reflect this change. Financial information by reportable segment for the periods ended December 31 is presented in the following tables. Inter-segment transactions between segments are not material, and are made on terms which are comparable to transactions with third parties.
The following table provides the reconciliation of consolidated Adjusted EBITDA to consolidated income statement before tax for the years ended December 31:
Geographical information of non-current assets The total of non-current assets (other than financial instruments, investments in subsidiaries and deferred tax assets, which are included in 'HQ and eliminations' along with consolidation eliminations), broken down by location of the assets, is shown in the following tables:
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IMPAIRMENT OF ASSETS (Tables) |
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Disclosure of impairment loss and reversal of impairment loss [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of total amount of the impairment loss allocated to the carrying amounts of assets | Due to operational performance of operating companies, in 2018 and 2017, respectively, the Company recorded an impairment of US$858 and US$66 as shown below. Impairment losses were allocated first to the existing carrying value of goodwill, and then subsequently to property and equipment and intangible assets based on relative carrying values.
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Schedule of key assumptions used in fair value less costs of disposal calculations | The table below shows key assumptions used in fair value less costs of disposal calculations.
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Schedule of key assumptions and inputs used by the Company in determining the recoverable amount |
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Schedule of information for cash-generating units | The following table illustrates the CGU with limited headroom and potential impairment that would need to be recorded if certain key parameters would adversely change by one percentage point within both the explicit forecast and terminal periods. Any additional adverse changes in the key parameters by more than one percentage point would increase the amount of impairment exposure approximately proportionally.
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DIVIDENDS PAID AND PROPOSED - Non-controlling Interests (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2019 |
Aug. 31, 2019 |
Apr. 30, 2019 |
Jan. 31, 2019 |
Sep. 30, 2018 |
Aug. 31, 2018 |
Jul. 31, 2018 |
Apr. 23, 2018 |
Oct. 31, 2017 |
Aug. 31, 2017 |
May 31, 2017 |
Feb. 28, 2017 |
Jan. 31, 2017 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Dividends [line items] | ||||||||||||||||
Paid or payable to non-controlling interests | $ 108,000,000 | $ 93,000,000 | $ 168,000,000 | |||||||||||||
Dividend payable to non-controlling interest | 0 | 7,000,000 | 26,000,000 | |||||||||||||
Omnium Telecom Algeria S.p.A | ||||||||||||||||
Dividends [line items] | ||||||||||||||||
Paid or payable to non-controlling interests | $ 69,000,000 | $ 76,000,000 | $ 82,000,000 | |||||||||||||
VIP Kazakhstan Holding AG | ||||||||||||||||
Dividends [line items] | ||||||||||||||||
Paid or payable to non-controlling interests | $ 24,000,000 | $ 11,000,000 | ||||||||||||||
TNS Plus LLP | ||||||||||||||||
Dividends [line items] | ||||||||||||||||
Paid or payable to non-controlling interests | $ 12,000,000 | $ 2,000,000 | $ 11,000,000 | $ 12,000,000 | $ 8,000,000 | |||||||||||
Rascom CJSC | ||||||||||||||||
Dividends [line items] | ||||||||||||||||
Paid or payable to non-controlling interests | $ 3,000,000 | $ 2,000,000 | ||||||||||||||
Buzton LLC | ||||||||||||||||
Dividends [line items] | ||||||||||||||||
Paid or payable to non-controlling interests | $ 2,000,000 | |||||||||||||||
VIP Kyrgyzstan Holding AG | ||||||||||||||||
Dividends [line items] | ||||||||||||||||
Paid or payable to non-controlling interests | $ 55,000,000 | |||||||||||||||
Pakistan Mobile Communications Limited | ||||||||||||||||
Dividends [line items] | ||||||||||||||||
Dividend declared to the non-controlling interest | $ 24,000,000 | $ 11,000,000 | $ 54,000,000 |
INVESTMENTS, DEBT AND DERIVATIVES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of detailed information about financial instruments [abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial assets | The Company holds the following investments and derivatives as of December 31:
* Investments in debt instruments relate to government bonds or bills and are measured at fair value through other comprehensive income (with recycling). |
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Schedule of financial liabilities | The Company holds the following outstanding debt and derivatives as of December 31:
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Schedule of principal amounts outstanding for interest-bearing loans and bonds | The Company had the following principal amounts outstanding for interest-bearing loans and bonds at December 31:
* Exportkreditnämnden (The Swedish Export Credit Agency) |
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Schedule of reconciliation of cash flows from financing activities |
* Early redemption premium accrued in respect of the settlement of the cash tender offer for certain outstanding debt securities. The amount accrued relates to the excess of purchase price over the principal amount outstanding, which, together with the release of unamortized debt issuance costs and unamortized fair value hedge basis adjustment, resulted in a loss from early debt redemption of US$30 in 2018. |
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Schedule of hedge accounting with derivatives as hedging items | The following table sets out the Company’s hedging instruments designated as net investment hedges as of December 31:
* Refer to the Debt and Derivatives section above in this Note for information regarding the carrying amounts of the hedging instruments. ** Hedging instruments have a weighted average term to maturity of 1 year as of December 31, 2019 (2018: 2 years ). The below table sets out the reconciliation of each component of equity and the analysis of other comprehensive income (all of which are attributable to the equity owners of the parent):
* Amounts represent the changes in fair value of the hedging instruments and closely approximate the changes in value of the hedged items used to recognize hedge ineffectiveness. ** Movements in the cost of hedging reserve are included within "Other" in respective section of statement of other comprehensive income |
ISSUED CAPITAL AND RESERVES - Major Shareholders (Details) - shares |
Dec. 31, 2019 |
Nov. 30, 2019 |
Oct. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|---|
ISSUED CAPITAL AND RESERVES | ||||
Free Float percentage | 43.80% | 43.80% | 34.90% | 29.60% |
Total percentage of common and voting shares | 100.00% | |||
Common shares | ||||
ISSUED CAPITAL AND RESERVES | ||||
Free Float (in shares) | 770,158,572 | |||
Share held by a subsidiary of the Company (in shares) | 7,603,731 | |||
Outstanding shares (in shares) | 1,756,731,135 | |||
L1T VIP Holdings S.à r.l. (“LetterOne”) | ||||
ISSUED CAPITAL AND RESERVES | ||||
Percentage of common and voting shares | 47.90% | |||
L1T VIP Holdings S.à r.l. (“LetterOne”) | Common shares | ||||
ISSUED CAPITAL AND RESERVES | ||||
Total outstanding common shares (in shares) | 840,625,001 | |||
Stichting Administratiekantoor Mobile Telecommunications Investor | ||||
ISSUED CAPITAL AND RESERVES | ||||
Percentage of common and voting shares | 8.30% | |||
Stichting Administratiekantoor Mobile Telecommunications Investor | Common shares | ||||
ISSUED CAPITAL AND RESERVES | ||||
Total outstanding common shares (in shares) | 145,947,562 |
FINANCIAL RISK MANAGEMENT - Liquidity risk (Details) ₨ in Millions, $ in Millions |
Dec. 31, 2019
USD ($)
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Dec. 31, 2019
PKR (₨)
|
Dec. 31, 2018
USD ($)
|
Dec. 31, 2018
PKR (₨)
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VEON Holdings B.V. – Revolving Credit Facility | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Facility amount | $ 1,688 | $ 1,688 | ||
Utilized | 0 | 0 | ||
Available | 1,688 | 1,688 | ||
PMCL - Syndicated Term Facility and Islamic Finance Facility | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Facility amount | 291 | ₨ 45,000 | ||
Utilized | 103 | 15,885 | ||
Available | 188 | 29,115 | ||
PMCL - Term Facility | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Facility amount | 93 | 14,369 | ||
Utilized | 19 | 2,963 | ||
Available | 74 | ₨ 11,406 | ||
PMCL - Syndicated Term Loan Facility | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Facility amount | 191 | ₨ 26,750 | ||
Utilized | 122 | 17,000 | ||
Available | 69 | 9,750 | ||
PMCL - Term Loan Facility | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Facility amount | 72 | 10,000 | ||
Utilized | 39 | 5,463 | ||
Available | 33 | ₨ 4,537 | ||
Veon Holdings B.V. Revolving Credit Facility, available until February 2021 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Reduced facility amount | 1,586 | $ 1,586 | ||
Veon Holdings B.V. Revolving Credit Facility, available until February 2022 | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Reduced facility amount | $ 1,382 | |||
Liquidity risk | ||||
Disclosure of detailed information about borrowings [line items] | ||||
Percentage of debt that will mature in less than one year | 21.00% | 21.00% | 17.00% | 17.00% |
EARNINGS PER SHARE |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings per share [abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS PER SHARE | EARNINGS PER SHARE Earnings per common share for all periods presented has been determined by dividing profit available to common shareholders by the weighted average number of common shares outstanding during the period. The following table sets forth the computation of basic and diluted earnings per share for continuing operations, for the years ended December 31:
The following table sets forth the computation of basic and diluted earnings per share for discontinued operations, for the years ended December 31:
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INVESTMENTS, DEBT AND DERIVATIVES |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Disclosure of detailed information about financial instruments [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INVESTMENTS, DEBT AND DERIVATIVES | FINANCING ACTIVITIES OF THE GROUP INVESTMENTS, DEBT AND DERIVATIVES INVESTMENTS AND DERIVATIVE ASSETS The Company holds the following investments and derivatives as of December 31:
* Investments in debt instruments relate to government bonds or bills and are measured at fair value through other comprehensive income (with recycling). Security deposits The ex-Warid license renewal was due in May 2019. Pursuant to directions from the Islamabad High Court, the Pakistan Telecommunication Authority (“PTA”) issued a license renewal decision on July 22, 2019 requiring payment of US$40 per MHz for 900 MHz spectrum and US$30 per MHz for 1800 MHz spectrum, equating to an aggregate price of approximately US$450 (excluding applicable taxes of approximately 13%). On August 17, 2019, Jazz appealed the PTA’s order to the Islamabad High Court. On August 21, 2019, the Islamabad High Court suspended the PTA’s order pending the outcome of the appeal and subject to Jazz making payment in the form of security (under protest) as per the options given in the PTA’s order. In September 2019, Jazz deposited approximately US$225 in order to maintain its appeal in the Islamabad High Court regarding the PTA's underlying decision on the license renewal. There were no specific terms and conditions attached to the deposit. The deposit is recorded as a financial investment asset within the statement of financial position and is presented as "Payments on deposits" within the statement of cash flows. The Islamabad High Court has not yet scheduled a hearing date. DEBT AND DERIVATIVES The Company holds the following outstanding debt and derivatives as of December 31:
Bank loans and bonds The Company had the following principal amounts outstanding for interest-bearing loans and bonds at December 31:
* Exportkreditnämnden (The Swedish Export Credit Agency) SIGNIFICANT CHANGES IN DEBT AND DERIVATIVES Reconciliation of cash flows from financing activities
* Early redemption premium accrued in respect of the settlement of the cash tender offer for certain outstanding debt securities. The amount accrued relates to the excess of purchase price over the principal amount outstanding, which, together with the release of unamortized debt issuance costs and unamortized fair value hedge basis adjustment, resulted in a loss from early debt redemption of US$30 in 2018. VEON Holdings BV new notes In October 2019, VEON Holdings issued US$$700 4.00% senior unsecured notes due 2025. The net proceeds of the notes issued have been used primarily to refinance drawings on the revolving credit facility used to fund the MTO for GTH. Pakistan Mobile Communications Limited new bilateral term facility In June 2019, PMCL entered into a bilateral secured PKR 14,369 million (approximately US$92) term facility with a local bank. The facility has a tenor of 7 years and bears interest at 6-month KIBOR increased by a margin of 0.75% per annum. The security is based on terms comparable with PMCL's existing debt. Pakistan Mobile Communications Limited new syndicated term facility and Islamic facility In June 2019, PMCL entered into a secured syndicated term facility and an Islamic financing facility for a joint amount of up to PKR 45,000 million (approximately US$287) and a period of up to 7 years. The cost of both facilities corresponds to 6-month KIBOR increased by a margin of 0.75% per annum. The security is based on terms comparable with PMCL's existing debt. Banglalink Digital Communications Limited new syndicated term facility agreement In April 2019, Banglalink entered into a new US$300 syndicated term facility agreement with several international banks. The facility is guaranteed by VEON Holdings for nil consideration. The facility has a tenor of 12 months with extension options for another 24 months upon agreement with the lenders, and was used to refinance the principal amount of Banglalink’s US$300 bond that matured in May 2019. Lease liabilities On January 1, 2019, the Company adopted IFRS 16 Leases, for further details please refer to Note 24. In 2019, interest in respect of lease liabilities is presented in "Finance costs" within the consolidated income statement. FAIR VALUES As of December 31, 2019, the carrying amounts of all financial assets and liabilities are equal to or approximate their respective fair values as shown in the table at the beginning of this note, with the exception of:
As of December 31, 2019 and December 31, 2018, all of the Group's financial instruments carried at fair value in the statement of financial position were measured based on Level 2 inputs, except for the Contingent consideration, for which fair value is classified as Level 3. All movements in Contingent consideration in the years ended December 31, 2019 and 2018 relate to changes in fair value, which are unrealized, and are recorded in “Other non-operating gain / (loss)” within the consolidated income statement. Fair values are estimated based on quoted market prices for our bonds, derived from market prices or by discounting contractual cash flows at the rate applicable for the instruments with similar maturity and risk profile. Observable inputs (Level 2) used in valuation techniques include interbank interest rates, bond yields, swap curves, basis swap spreads, foreign exchange rates and credit default spreads. On a quarterly basis, the Company reviews if there are any indicators for a possible transfer between fair value hierarchy levels. This depends on how the Company is able to obtain the underlying input parameters when assessing the fair valuations. During the years ended December 31, 2019 and 2018, there were no transfers between Level 1, Level 2 and Level 3 fair value measurements. HEDGE ACCOUNTING The following table sets out the Company’s hedging instruments designated as net investment hedges as of December 31:
* Refer to the Debt and Derivatives section above in this Note for information regarding the carrying amounts of the hedging instruments. ** Hedging instruments have a weighted average term to maturity of 1 year as of December 31, 2019 (2018: 2 years ). There is an economic relationship between the hedged net investments and the hedging instruments due to the translation risk inherent in the hedged items that matches the foreign exchange risk of the hedging instruments. The hedge ratio for each of the above relationships was set at 1:1 as the underlying risk of the hedging instruments is identical to the hedged risk and the nominal value of hedging instruments has not exceeded the amounts of respective net investments. Hedge ineffectiveness might arise from:
During the periods covered by these consolidated financial statements, the amount of ineffectiveness was immaterial. Impact of hedge accounting on equity The below table sets out the reconciliation of each component of equity and the analysis of other comprehensive income (all of which are attributable to the equity owners of the parent):
* Amounts represent the changes in fair value of the hedging instruments and closely approximate the changes in value of the hedged items used to recognize hedge ineffectiveness. ** Movements in the cost of hedging reserve are included within "Other" in respective section of statement of other comprehensive income ACCOUNTING POLICIES AND SOURCES OF ESTIMATION UNCERTAINTY Put options over non-controlling interest Put options over non-controlling interest of a subsidiary are accounted for as financial liabilities in the Company’s consolidated financial statements. The put-option redemption liability is measured at the discounted redemption amount. Interest over the put-option redemption liability will accrue in line with the effective interest rate method, until the options have been exercised or are expired. Derivative contracts VEON enters into derivative contracts, including swaps and forward contracts, to manage certain foreign currency and interest rate exposures. Any derivative instruments for which no hedge accounting is applied are recorded at fair value with any fair value changes recognized directly in profit or loss. Although some of the derivatives entered into by the Company have not been designated in hedge accounting relationships, they act as economic hedges and offset the underlying transactions when they occur. Hedges of a net investment The Company applies net investment hedge accounting to mitigate foreign currency translation risk related to the Company’s investments in foreign operations. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognized in other comprehensive income within the “Foreign currency translation” line item. Where the hedging instrument’s foreign currency retranslation is greater (in absolute terms) than that of the hedged item, the excess amount is recorded in profit or loss as ineffectiveness. The gain or loss on the hedging instrument relating to the effective portion of the hedge that has been recognized in other comprehensive income shall be reclassified from equity to profit or loss as a reclassification adjustment on the disposal or partial disposal of the foreign operation. Cash flows arising from derivative instruments for which hedge accounting is applied are reported in the statement of cash flows within the line item where the underlying cash flows of the hedged item are recorded. Fair value of financial instruments All financial assets and liabilities are measured at amortized cost, except those which are measured at fair value as presented within this Note. Where the fair value of financial assets and liabilities recorded in the statement of financial position cannot be derived from active markets, their fair value is determined using valuation techniques, including discounted cash flows models. The inputs to these models are taken from observable markets, but when this is not possible, a degree of judgment is required in establishing fair values. The judgments include considerations regarding inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. Measurement of lease liabilities Lease liabilities are measured upon initial recognition at the present value of the future lease and related fixed services payments over the lease term, discounted with the country specific incremental borrowing rate as the rate implicit in the lease is generally not available. Subsequently lease liabilities are measured at amortized cost using the effective interest rate method. A significant portion of the lease contracts included within Company’s lease portfolio includes lease contracts which are extendable through mutual agreement between VEON and the lessor, or lease contracts which are cancelable by the Company immediately or on short notice. The Company includes these cancelable future lease periods within the lease term, which increases the future lease payments used in determining the lease liability upon initial recognition. VEON's determination of the lease term is based on facts and circumstances related to the underlying leased asset and lease contracts. |
INVESTMENTS, DEBT AND DERIVATIVES - Investments and derivative assets (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
|||
---|---|---|---|---|---|
FINANCIAL ASSETS | |||||
Carrying value | $ 317 | $ 146 | |||
Non-current | 235 | 58 | [1] | ||
Current | 82 | 88 | [1] | ||
Financial assets at fair value through profit or loss | |||||
FINANCIAL ASSETS | |||||
Carrying value | 45 | 98 | |||
Financial assets at fair value through profit or loss | Derivatives not designated as hedges | |||||
FINANCIAL ASSETS | |||||
Carrying value | 11 | 14 | |||
Financial assets at fair value through profit or loss | Derivatives designated as net investment hedges | |||||
FINANCIAL ASSETS | |||||
Carrying value | 0 | 45 | |||
Financial assets at fair value through profit or loss | Investments in debt instruments | |||||
FINANCIAL ASSETS | |||||
Carrying value | 34 | 36 | |||
Financial assets at fair value through profit or loss | Other | |||||
FINANCIAL ASSETS | |||||
Carrying value | 0 | 3 | |||
At amortized cost | |||||
FINANCIAL ASSETS | |||||
Carrying value | 272 | 48 | |||
At amortized cost | Security deposits and cash collateral | |||||
FINANCIAL ASSETS | |||||
Carrying value | 256 | 31 | |||
At amortized cost | Other investments | |||||
FINANCIAL ASSETS | |||||
Carrying value | $ 16 | $ 17 | |||
|
PROVISIONS AND CONTINGENT LIABILITIES - Movement in provisions (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Disclosure of other provisions [line items] | ||
Balance at beginning of the year | $ 344 | $ 287 |
Arising during the year | 180 | 63 |
Reclassified to assets held for sale | (5) | |
Utilized | (163) | (29) |
Unused amounts reversed | (19) | (10) |
Transfer and reclassification | 7 | 65 |
Discount rate adjustment and imputed interest (change in estimate) | 8 | 8 |
Translation adjustments and other | 3 | (35) |
Balance at end of the year | 360 | 344 |
Non-current | 138 | 110 |
Current | 222 | 234 |
Non-income tax provisions | ||
Disclosure of other provisions [line items] | ||
Balance at beginning of the year | 150 | 98 |
Arising during the year | 79 | 11 |
Reclassified to assets held for sale | (1) | |
Utilized | (105) | (11) |
Unused amounts reversed | (4) | 0 |
Transfer and reclassification | 5 | 65 |
Translation adjustments and other | 1 | (12) |
Balance at end of the year | 126 | 150 |
Non-current | 0 | 0 |
Current | 126 | 150 |
Decom-missioning provision | ||
Disclosure of other provisions [line items] | ||
Balance at beginning of the year | 93 | 106 |
Arising during the year | 28 | 4 |
Reclassified to assets held for sale | (4) | |
Utilized | (1) | (1) |
Unused amounts reversed | 0 | (2) |
Transfer and reclassification | 5 | 0 |
Discount rate adjustment and imputed interest (change in estimate) | 8 | 8 |
Translation adjustments and other | 5 | (18) |
Balance at end of the year | 138 | 93 |
Non-current | 138 | 93 |
Current | 0 | 0 |
Legal provision | ||
Disclosure of other provisions [line items] | ||
Balance at beginning of the year | 44 | 49 |
Arising during the year | 3 | 5 |
Utilized | (6) | (2) |
Unused amounts reversed | (15) | (8) |
Transfer and reclassification | (1) | 0 |
Translation adjustments and other | 1 | 0 |
Balance at end of the year | 26 | 44 |
Non-current | 0 | 17 |
Current | 26 | 27 |
Other provisions | ||
Disclosure of other provisions [line items] | ||
Balance at beginning of the year | 57 | 34 |
Arising during the year | 70 | 43 |
Utilized | (51) | (15) |
Unused amounts reversed | 0 | 0 |
Transfer and reclassification | (2) | 0 |
Translation adjustments and other | (4) | (5) |
Balance at end of the year | 70 | 57 |
Non-current | 0 | 0 |
Current | $ 70 | $ 57 |
GENERAL INFORMATION |
12 Months Ended |
---|---|
Dec. 31, 2019 | |
General Information | |
GENERAL INFORMATION | GENERAL INFORMATION ABOUT THE GROUP GENERAL INFORMATION VEON Ltd. (“VEON”, the “Company”, and together with its consolidated subsidiaries, the “Group” or “we”) was incorporated in Bermuda on June 5, 2009. The registered office of VEON is Victoria Place, 31 Victoria Street, Hamilton HM 10, Bermuda. VEON’s headquarters and the principal place of business are located at Claude Debussylaan 88, 1082 MD Amsterdam, the Netherlands. VEON generates revenue from the provision of voice, data and other telecommunication services through a range of mobile and fixed-line technologies, as well as selling equipment and accessories. VEON’s American Depository Shares (“ADSs”) are listed on the NASDAQ Global Select Market and VEON’s common shares are listed on Euronext Amsterdam, the regulated market of Euronext Amsterdam N.V. (“Euronext Amsterdam”). The consolidated financial statements were authorized by the Board of Directors for issuance on March 13, 2020. The Company has the ability to amend and reissue the consolidated financial statements. The consolidated financial statements are presented in United States dollars (“U.S. dollar” or “US$”). In these Notes, U.S. dollar amounts are presented in millions, except for share and per share (or ADS) amounts and as otherwise indicated. Major developments during the year ended December 31, 2019 On January 1, 2019, the Company adopted a new accounting standard – IFRS 16 Leases – using the modified retrospective approach. This means that the cumulative impact of the adoption was recognized in retained earnings as of January 1, 2019 and comparatives were not restated. For further details please refer to Note 24. In February 2019, the Company announced a revised arrangement with Ericsson to upgrade its core IT systems in several countries in the coming years. The parties have signed binding terms to vary the existing agreements and as a result, VEON received US$350 during the first half of 2019. For further details please refer to Note 10. In August 2019, VEON completed the purchase of 1,914,322,110 shares, representing approximately 40.55% of issued shares of Global Telecom Holding S.A.E. ("GTH"). For further details please refer to Note 10. In October 2019, the Company issued its US$700 4% senior unsecured notes ("Notes") due in 2025. The net proceeds of the offering have been used primarily to refinance certain existing outstanding debt and address upcoming debt maturities, including drawings on the revolving credit facility used to fund the mandatory tender offer for GTH, and for general corporate purposes. For further details please refer to Note 15. On October 31, 2019, VEON announced that the Deferred Prosecution Agreement (“DPA”), that VEON entered into with the US Department of Justice in February 2016 concluded. This marks the conclusion of the compliance monitorship, conducted in connection with the DPA and VEON’s settlement with the US Securities and Exchange Commission. For further details please refer to Note 8. In November 2019, Telenor, one of the Company's main shareholders, announced the sale of the balance of their shares in the VEON Group. Telenor held approximately 157 million shares, representing approximately 8.9% of VEON’s total outstanding equity. With this sale, the free float of the VEON Group has increased from approximately 34.9% to 43.8%. For further details please refer to Note 18. |
TRADE AND OTHER RECEIVABLES - Movements in the allowance for expected credit losses (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments [line items] | |||
Trade receivables | $ 610 | $ 545 | $ 629 |
Expected credit losses | |||
Disclosure of reconciliation of changes in loss allowance and explanation of changes in gross carrying amount for financial instruments [line items] | |||
Trade receivables | (176) | (171) | (169) |
Trade receivables | |||
Reconciliation of changes in allowance account for credit losses of financial assets [abstract] | |||
Balance as of January 1 | 171 | 169 | 160 |
Adjustment due to new accounting standards | 0 | 14 | 0 |
Accruals for expected credit losses | 66 | 47 | 36 |
Recoveries | (8) | (17) | (9) |
Accounts receivable written off | (31) | (18) | (13) |
Reclassification | (24) | 0 | 0 |
Foreign currency translation adjustment | 2 | (15) | (4) |
Other movements | 0 | (9) | (1) |
December 31 | $ 176 | $ 171 | $ 169 |
INVESTMENTS IN SUBSIDIARIES - Financial information of subsidiaries that have material NCIs (Details) - USD ($) $ in Millions |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
Aug. 31, 2019 |
|
Investments in subsidiaries | ||||
Profit/(loss) attributable to material NCIs | $ 62 | $ (220) | $ (29) | |
Kar-Tel | ||||
Investments in subsidiaries | ||||
Equity interest held by NCIs | 25.00% | 25.00% | ||
Book values of material NCIs | $ 232 | $ 228 | ||
Profit/(loss) attributable to material NCIs | $ 27 | $ 19 | ||
Sky Mobile | ||||
Investments in subsidiaries | ||||
Equity interest held by NCIs | 49.90% | 49.90% | ||
Book values of material NCIs | $ 79 | $ 133 | ||
Profit/(loss) attributable to material NCIs | $ (44) | $ (32) | ||
Global Telecom Holding S.A.E | ||||
Investments in subsidiaries | ||||
Equity interest held by NCIs | 0.50% | 42.30% | ||
Book values of material NCIs | $ 853 | $ (1,190) | $ 1,986 | |
Profit/(loss) attributable to material NCIs | $ 75 | $ (204) | ||
Omnium Telecom Algérie S.p.A. | ||||
Investments in subsidiaries | ||||
Equity interest held by NCIs | 54.40% | 73.70% | ||
Book values of material NCIs | $ 871 | $ 1,091 | ||
Profit/(loss) attributable to material NCIs | $ 55 | $ 1 |
INTANGIBLE ASSETS - Summary of the movement in the net book value of intangible assets (Details) - USD ($) $ in Millions |
12 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at beginning of the period | $ 5,670 | [1] | $ 6,786 | ||||
Adjustment due to IFRS 16 | (15) | ||||||
Additions | 239 | 717 | |||||
Disposals | (2) | (7) | |||||
Amortization charge for the year | (394) | (495) | |||||
Impairment | (57) | (523) | $ (51) | ||||
Translation adjustment | 247 | (808) | |||||
Balance at end of the period | 5,688 | 5,670 | [1] | 6,786 | |||
Acquired intangible assets, not yet paid | 148 | 100 | |||||
Telecommunication licenses, frequencies & permissions | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at beginning of the period | 1,195 | 1,256 | |||||
Adjustment due to IFRS 16 | 0 | ||||||
Additions | 50 | 526 | |||||
Disposals | 0 | (6) | |||||
Amortization charge for the year | (159) | (176) | |||||
Impairment | (3) | (251) | |||||
Transfer | 0 | 0 | |||||
Translation adjustment | 17 | (154) | |||||
Balance at end of the period | 1,100 | 1,195 | 1,256 | ||||
Software | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at beginning of the period | 264 | 351 | |||||
Adjustment due to IFRS 16 | 0 | ||||||
Additions | 177 | 171 | |||||
Disposals | 0 | (1) | |||||
Amortization charge for the year | (155) | (179) | |||||
Impairment | 0 | (48) | |||||
Transfer | 8 | 2 | |||||
Translation adjustment | 22 | (32) | |||||
Balance at end of the period | 316 | 264 | 351 | ||||
Brands and trademarks | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at beginning of the period | 178 | 262 | |||||
Adjustment due to IFRS 16 | 0 | ||||||
Additions | 0 | 0 | |||||
Disposals | 0 | 0 | |||||
Amortization charge for the year | (30) | (74) | |||||
Impairment | 0 | 0 | |||||
Transfer | 0 | 0 | |||||
Translation adjustment | 1 | (10) | |||||
Balance at end of the period | 149 | 178 | 262 | ||||
Customer relationships | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at beginning of the period | 177 | 255 | |||||
Adjustment due to IFRS 16 | 0 | ||||||
Additions | 0 | 0 | |||||
Disposals | 0 | 0 | |||||
Amortization charge for the year | (42) | (54) | |||||
Impairment | 0 | 0 | |||||
Transfer | 0 | 0 | |||||
Translation adjustment | 7 | (24) | |||||
Balance at end of the period | 142 | 177 | 255 | ||||
Other intangible assets | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at beginning of the period | 40 | 44 | |||||
Adjustment due to IFRS 16 | (15) | ||||||
Additions | 12 | 20 | |||||
Disposals | (2) | 0 | |||||
Amortization charge for the year | (8) | (12) | |||||
Impairment | 0 | 0 | |||||
Transfer | (8) | (2) | |||||
Translation adjustment | 3 | (10) | |||||
Balance at end of the period | 22 | 40 | 44 | ||||
Goodwill | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at beginning of the period | 3,816 | 4,618 | |||||
Adjustment due to IFRS 16 | 0 | ||||||
Additions | 0 | 0 | |||||
Disposals | 0 | 0 | |||||
Impairment | (54) | (224) | |||||
Transfer | 0 | 0 | |||||
Translation adjustment | 197 | (578) | |||||
Balance at end of the period | 3,959 | $ 3,816 | $ 4,618 | ||||
Cost | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | 9,936 | ||||||
Cost | Telecommunication licenses, frequencies & permissions | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | 2,395 | ||||||
Cost | Software | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | 1,157 | ||||||
Cost | Brands and trademarks | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | 499 | ||||||
Cost | Customer relationships | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | 1,716 | ||||||
Cost | Other intangible assets | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | 210 | ||||||
Cost | Goodwill | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | 3,959 | ||||||
Accumulated depreciation and impairment | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | (4,248) | ||||||
Accumulated depreciation and impairment | Telecommunication licenses, frequencies & permissions | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | (1,295) | ||||||
Accumulated depreciation and impairment | Software | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | (841) | ||||||
Accumulated depreciation and impairment | Brands and trademarks | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | (350) | ||||||
Accumulated depreciation and impairment | Customer relationships | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | (1,574) | ||||||
Accumulated depreciation and impairment | Other intangible assets | |||||||
Reconciliation of changes in intangible assets and goodwill [abstract] | |||||||
Balance at end of the period | $ (188) | ||||||
|
OPERATING REVENUE - Assets and liabilities arising from contracts with customers (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Revenue [abstract] | ||
Receivables (billed) | $ 748 | $ 672 |
Contract assets (unbilled) | 38 | 44 |
Contract liabilities | (243) | (361) |
Customer acquisition costs | $ 101 | $ 83 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
|||
---|---|---|---|---|---|
Non-current assets | |||||
Property and equipment | $ 7,340 | ||||
Property and equipment | [1] | $ 4,932 | |||
Intangible assets | 5,688 | 5,670 | [1] | ||
Investments and derivatives | 235 | 58 | [1] | ||
Deferred tax assets | 134 | 197 | [1] | ||
Other assets | 163 | 135 | [1] | ||
Total non-current assets | 13,560 | 10,992 | [1] | ||
Current assets | |||||
Inventories | 169 | 141 | [1] | ||
Trade and other receivables | 628 | 577 | [1] | ||
Investments and derivatives | 82 | 88 | [1] | ||
Current income tax assets | 16 | 112 | [1] | ||
Other assets | 354 | 367 | [1] | ||
Assets held for sale | 0 | 17 | [1] | ||
Cash and cash equivalents | 1,250 | 1,808 | [1] | ||
Total current assets | 2,499 | 3,110 | [1] | ||
Total assets | 16,059 | 14,102 | [1] | ||
Equity | |||||
Equity attributable to equity owners of the parent | 1,226 | 3,670 | [1] | ||
Non-controlling interests | 994 | (891) | [1] | ||
Total equity | 2,220 | 2,779 | [1] | ||
Non-current liabilities | |||||
Debt and derivatives | 7,759 | 6,567 | [1] | ||
Provisions | 138 | 110 | [1] | ||
Deferred tax liabilities | 141 | 180 | [1] | ||
Other liabilities | 33 | 53 | [1] | ||
Total non-current liabilities | 8,071 | 6,910 | [1] | ||
Current liabilities | |||||
Trade and other payables | 1,847 | 1,624 | [1] | ||
Debt and derivatives | 2,585 | 1,289 | [1] | ||
Provisions | 222 | 234 | [1] | ||
Current income tax payables | 102 | 196 | [1] | ||
Other liabilities | 1,012 | 1,066 | [1] | ||
Liabilities held for sale | 0 | 4 | [1] | ||
Total current liabilities | 5,768 | 4,413 | [1] | ||
Total equity and liabilities | $ 16,059 | $ 14,102 | [1] | ||
|
ISSUED CAPITAL AND RESERVES - Common Stock (Details) - Common shares - $ / shares |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
ISSUED CAPITAL AND RESERVES | ||
Authorized common shares (nominal value of US$0.001 per share) | 1,849,190,670 | 1,849,190,670 |
Par value ($ per share) | $ 0.001 | |
Issued shares, including 7,603,731 shares held by a subsidiary of the Company | 1,756,731,135 | 1,756,731,135 |
Share held by a subsidiary of the Company (in shares) | 7,603,731 |
FINANCIAL RISK MANAGEMENT - Foreign currency risk (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Risk of exchange rate depreciation | ||
Foreign currency sensitivity | ||
Change in foreign exchange rate against US$ | 10.00% | 10.00% |
Risk of exchange rate appreciation | ||
Foreign currency sensitivity | ||
Change in foreign exchange rate against US$ | 10.00% | 10.00% |
Euro | Risk of exchange rate depreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | $ (2) | $ (2) |
Euro | Risk of exchange rate appreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | 3 | 3 |
Russian Ruble | Risk of exchange rate depreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | (9) | (32) |
Effect on other comprehensive income | 119 | 70 |
Russian Ruble | Risk of exchange rate appreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | 11 | 35 |
Effect on other comprehensive income | (145) | (77) |
Bangladeshi Taka | Risk of exchange rate depreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | (27) | (76) |
Bangladeshi Taka | Risk of exchange rate appreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | 30 | 83 |
Pakistani Rupee | Risk of exchange rate depreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | (10) | (19) |
Pakistani Rupee | Risk of exchange rate appreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | 11 | 20 |
Georgian Lari | Risk of exchange rate depreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | (36) | (34) |
Georgian Lari | Risk of exchange rate appreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | 39 | 37 |
Other currencies (net) | Risk of exchange rate depreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | (1) | 0 |
Other currencies (net) | Risk of exchange rate appreciation | ||
Foreign currency sensitivity | ||
Effect on profit / (loss) before tax | $ 2 | $ 0 |
SIGNIFICANT TRANSACTIONS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||
Significant Transactions | |||||||||||||||||||||||||||||||||||||||||
Schedule of effect of the disposal | The effect of the disposal is detailed below:
|
DIVIDENDS PAID AND PROPOSED - Declared (Details) - $ / shares |
1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Feb. 14, 2020 |
Feb. 29, 2020 |
Aug. 31, 2019 |
Mar. 31, 2019 |
Aug. 31, 2018 |
Dec. 31, 2019 |
|
Dividends [line items] | ||||||
Dividends paid (in dollars per share) | $ 0.13 | $ 0.17 | $ 0.12 | $ 0.28 | ||
Maximum | ||||||
Dividends [line items] | ||||||
Tax rate withholdings on dividend paid to company's ADS depositary | 15.00% | |||||
Dividend approval by supervisory board | ||||||
Dividends [line items] | ||||||
Dividends declared (in dollars per share) | $ 0.15 | $ 0.15 |
INVESTMENTS IN SUBSIDIARIES (Tables) |
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Disclosure of subsidiaries [abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of information about significant subsidiaries | The Company held investments in material subsidiaries for the years ended December 31 as detailed in the table below. The equity interest presented represents the economic rights available to the Company.
* The Group has concluded that it controls Omnium Telecom Algérie S.p.A and Optimum Telecom Algeria S.p.A, see 'Significant accounting judgments' below for further details. |
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Schedule of information about materially partly-owned subsidiaries | Financial information of subsidiaries that have material non-controlling interests (“NCIs”) is provided below:
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Schedule of summarized income statement of subsidiaries before inter-company eliminations | Summarized income statement
* Included within Other (expenses) / income for GTH is a gain of US$1,262 relating to the intragroup transfer of Jazz, Banglalink and Med Cable, refer to Note 10 for further details. |
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Schedule of summarized financial position of subsidiaries before inter-company eliminations | Summarized statement of financial position
* The total equity of GTH attributed to non-controlling interests includes the total equity which is attributed to non-controlling interests of OTA, GTH’s subsidiary. |
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Schedule of summarized cash flow statement of subsidiaries before inter-company eliminations | Summarized statement of cash flows
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DIVIDENDS PAID AND PROPOSED |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dividends Paid And Proposed | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DIVIDENDS PAID AND PROPOSED | DIVIDENDS PAID AND PROPOSED Pursuant to Bermuda law, VEON is restricted from declaring or paying a dividend if there are reasonable grounds for believing that
Following table provides an overview of the dividends announced by VEON for years 2019 and 2018:
The Company makes appropriate tax withholdings of up to 15% when the dividends are being paid to the Company’s share depositary, The Bank of New York Mellon. For ordinary shareholders at Euronext Amsterdam, dividends are paid in euro. DIVIDENDS DECLARED TO NON-CONTROLLING INTERESTS During the 2019, 2018 and 2017 years, certain subsidiaries of the Company declared dividends, of which a portion was paid or payable to non-controlling interests.
In 2019, PMCL, a subsidiary of the Company, declared dividends to its shareholders, of which US$24 (2018: US$11, 2017: US$54) was declared to non-controlling shareholders of PMCL. Dividends declared to non-controlling interests of PMCL reduces the principal amount of the put-option liability over non-controlling interest on the date of declaration. As of December 31, 2019, there is no remaining amount payable to non-controlling interests (2018: US$7, 2017: US$26). |
CASH AND CASH EQUIVALENTS |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash and cash equivalents [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
CASH AND CASH EQUIVALENTS | CASH AND CASH EQUIVALENTS Cash and cash equivalents are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. Cash and cash equivalents are comprised of cash at bank and on hand and highly liquid investments that are readily convertible to known amounts of cash, are subject to only an insignificant risk of changes in value and have an original maturity of less than three months. Cash and cash equivalents consisted of the following items as of December 31:
Cash at bank earns interest at floating rates based on bank deposit rates. Short-term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn interest at the respective short-term deposit rates. The imposition of currency exchange controls or other similar restrictions on currency convertibility in the countries in which VEON operates could limit VEON’s ability to convert local currencies or repatriate local cash in a timely manner or at all, as well as remit dividends from the respective countries. As of December 31, 2019, there were no restricted cash and cash equivalent balances (2018: nil). Cash balances include investments in money market funds of US$155 (2018: US$349), which are carried at fair value through profit or loss with gains presented within ‘Other non-operating gain / (loss)’ within the consolidated income statement. As of December 31, 2019, some bank accounts forming part of a cash pooling program and being an integral part of the Company’s cash management remained overdrawn by US$46 (2018: US$17). Even though the total balance of the cash pool remained positive, the Company has no legally enforceable right of set-off and therefore the overdrawn accounts are presented as debt and derivatives within the statement of financial position. At the same time, because the overdrawn accounts are an integral part of the Company’s cash management, they were included as cash and cash equivalents within the statement of cash flows. |
CONDENSED SEPARATE FINANCIAL INFORMATION OF VEON (Notes) |
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Condensed Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
CONDENSED SEPARATE FINANCIAL INFORMATION OF VEON | CONDENSED SEPARATE FINANCIAL INFORMATION OF VEON Certain of the consolidated entities by VEON Ltd. are restricted from remitting funds in the form of cash dividends or loans by a variety of regulations, contractual or local statutory requirements. Regulation S-X requires that condensed financial information of the registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries means that amount of the registrant’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party. The Company performed a test on the restricted net assets of consolidated subsidiaries and concluded the restricted net assets exceed 25% of the consolidated net assets of the Company as of December 31, 2019. As of December 31, 2019, VEON Ltd. had restricted net assets of 58%, compared to 22% in 2018, of total net assets. This was primarily due to the purchase of 41% of GTH’s issued shares, which had the effect of decreasing our shareholder’s equity and thus increasing the share of restricted assets proportional to the amount of shareholder’s equity. Accordingly, separate condensed financial statements of VEON Ltd. have been prepared, in accordance with Rule 5-04 and Rule 12-04 of SEC Regulation S-X. The separate condensed financial statements should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes thereto. The separate condensed financial statements have been prepared in accordance with Title 9 of Book 2 of the Dutch Civil Code. In accordance with the provisions of Article 362, paragraph 8, Title 9 of Book 2 of the Dutch Civil Code the accounting policies used are the same as those explained in the Notes to the Consolidated Financial Statements, prepared under IFRS, except for the accounting policy disclosed below. Subsidiaries Subsidiaries are all entities (including intermediate subsidiaries) over which the Company has control. The Company controls an entity when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Subsidiaries are recognized from the date on which control is transferred to the Company or its intermediate holding entities. They are derecognized from the date that control ceases. Investments in subsidiaries are measured at net asset value. Net asset value is based on the measurement of assets, provisions and liabilities and determination of profit based on the principles applied in the consolidated financial statements. If the valuation of a subsidiary based on the net asset value is negative, it will be stated at nil. If and insofar as the Company can be held fully or partially liable for the debts of the subsidiary or has the firm intention of enabling the participation to settle its debts, a provision is recognized for this. Newly acquired subsidiaries are initially recognized on the basis of the fair value of their identifiable assets and liabilities at the acquisition date. For subsequent valuations, the principles that apply for these financial statements are used. The amount by which the carrying amount of the subsidiary has changed since the previous financial statements as a result of the net result achieved by the subsidiary is recognized in the income statement. Condensed statement of financial position: As of December 31
Condensed income statement: for the years ended December 31
Condensed statements of comprehensive income: for the years ended December 31
Condensed statement of cash flows: for the years ended December 31
As of December 31, 2019, 2018 and 2017 there were no material contingencies, significant provisions of long-term obligations, mandatory dividend or redemption requirements of redeemable stocks or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any. Amsterdam, March 13, 2020 VEON Ltd. |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (Tables) |
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Schedule of selling, general and administrative expenses | Selling, general and administrative expenses consisted of the following items for the years ended December 31:
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PROPERTY AND EQUIPMENT |
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Property, plant and equipment [abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The following table summarizes the movement in the net book value of property and equipment for the years ended December 31:
There were no material changes in estimates related to property and equipment in 2019 other than the impairment described in Note 11 of US51 (2018: US$335). During 2019, VEON acquired property and equipment in the amount of US$480 (2018: US$346), which were not paid for as of year-end. Property and equipment pledged as security for bank borrowings amounts to US$652 as of December 31, 2019 (2018: US$750), and primarily relate to securities for borrowings of Pakistan Mobile Communications Limited ("PMCL"). The following table summarizes the movement in the net book value of right-of-use assets ("ROU") for the year ended December 31:
COMMITMENTS Capital commitments for the future purchase of equipment are as follows as of December 31:
Capital commitments arising from telecommunications licenses VEON’s ability to generate revenue in the countries it operates is dependent upon the operation of the wireless telecommunications networks authorized under its various licenses for GSM-900/1800, “3G” (UMTS / WCDMA) mobile radiotelephony communications services and “4G” (LTE). Under the license agreements, operating companies are subject to certain commitments, such as territory or population coverage, level of capital expenditures, and number of base stations to be fulfilled within a certain timeframe. If we are found to be involved in practices that do not comply with applicable laws or regulations, we may be exposed to significant fines, the risk of prosecution or the suspension or loss of our licenses, frequency allocations, authorizations or various permissions, any of which could harm our business, financial condition, results of operations, or cash flows. After expiration of the license, our operating companies might be subject to additional payments for renewals, as well as new license capital and other commitments. ACCOUNTING POLICIES Property and equipment is stated at cost, net of any accumulated depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. The useful of life of VEON's assets generally fall within the following ranges:
Each asset’s residual value, useful life and method of depreciation is reviewed at the end of each financial year and adjusted prospectively, if necessary. SOURCE OF ESTIMATION UNCERTAINTY Depreciation and amortization of non-current assets Depreciation and amortization expenses are based on management estimates of useful life, residual value and amortization method of property and equipment and intangible assets. Estimates may change due to technological developments, competition, changes in market conditions and other factors and may result in changes in the estimated useful life and in the amortization or depreciation charges. Technological developments are difficult to predict and our views on the trends and pace of development may change over time. Some of the assets and technologies, in which the Group invested several years ago, are still in use and provide the basis for new technologies. The useful lives of property and equipment and intangible assets are reviewed at least annually, taking into consideration the factors mentioned above and all other relevant factors. Estimated useful lives for similar types of assets may vary between different entities in the Group due to local factors such as growth rate, maturity of the market, historical and expected replacements or transfer of assets and quality of components used. |
PROVISIONS AND CONTINGENT LIABILITIES |
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PROVISIONS AND CONTINGENT LIABILITIES | PROVISIONS AND CONTINGENT LIABILITIES PROVISIONS The following table summarizes the movement in provisions for the years ended December 31:
* Certain comparative amounts have been reclassified to conform to the current period presentation, refer to Note 23 for further details. The timing of payments in respect of provisions is, with some exceptions, not contractually fixed and cannot be estimated with certainty. In addition, with respect to legal proceedings, given inherent uncertainties, there can be no guarantee that the ultimate outcome will be in line with VEON’s current expectations. See “Sources of estimation uncertainty” below for further details regarding assumptions and sources of uncertainty. The Group has recognized a provision for decommissioning obligations associated with future dismantling of its towers in various jurisdictions. Settlement of GTH Taxes In June 2019, GTH reached agreement with the Egyptian Tax Authority ("ETA") to settle tax liabilities of GTH and its Egyptian subsidiaries for a total amount of US$136 (the "GTH Tax Settlement"). The GTH Tax Settlement is in respect of tax liabilities of GTH and its Egyptian subsidiaries for the tax years 2000 through 2018 was settled following payments made in June 2019 and September 2019. As a result of the GTH Tax Settlement, the Group recorded an increase in non-income tax provisions of US$27, recorded in 'Selling, general and administrative expenses' in the consolidated income statement, and an increase in income tax liabilities of US$29, recorded in 'Income tax expenses' in the consolidated income statement (refer Note 9). Investigations by SEC / DOJ / OM During the first quarter of 2016, the Company reached resolutions through agreements with the U.S. Securities and Exchange Commission (“SEC”), the U.S. Department of Justice (“DOJ”), and the Dutch Public Prosecution Service (Openbaar Ministerie) (“OM”) relating to the previously disclosed investigations under the U.S. Foreign Corrupt Practices Act (the “FCPA”) and relevant Dutch laws. On February 18, 2016, the United States District Court for the Southern District of New York (the “District Court”) approved the agreements with the DOJ relating to charges that the Company and its subsidiary violated the anti-bribery, books-and-records and internal controls provisions of the FCPA. These agreements consisted of the deferred prosecution agreement (the “DPA”), entered into by VEON and the DOJ and a guilty plea by Unitel, a subsidiary of VEON operating in Uzbekistan. VEON also agreed to oversight by an independent compliance monitor to promote continued, and regular, compliance enhancements across the Company and its subsidiaries. On October 31, 2019, VEON announced that the DPA had concluded and the DOJ filed a motion to dismiss the criminal information in the District Court, marking the conclusion of the compliance monitorship required by the DPA and VEON’s settlement with the US Department of Justice and Securities and Exchange Commission. On February 26, 2020, the District Court granted the motion to dismiss with prejudice and closed the case. In 2019, the Company paid US$6 in legal fees (2018: US$7), utilizing this provision. The Company has revised its estimates in respect of this provision, with a reduction of US$10 leading to a remaining provision of US$10 as of December 31, 2019 (2018: US$26). CONTINGENT LIABILITIES The Group had contingent liabilities as of December 31, 2019 as set out below. VEON - Securities Class Action On November 4, 2015, a class action lawsuit was filed in the United States against VEON and certain of its then current and former officers by Charles Kux-Kardos, on behalf of himself and other investors in the Company alleging certain violations of the U.S. federal securities laws in connection with the Company’s public disclosures relating to its operations in Uzbekistan. On December 4, 2015, a second complaint was filed by Westway Alliance Corp. that asserts essentially the same claims in connection with essentially the same disclosures. On April 27, 2016, the court consolidated the two actions and appointed Westway as lead plaintiff. On May 6, 2016, a motion for reconsideration was filed on the appointment of Westway as lead plaintiff and on September 26, 2016, the court affirmed the selection of Westway as the lead plaintiff. An amended complaint was filed on December 9, 2016. On September 19, 2017, the Court in the Southern District of New York rendered a decision granting in part VEON’s motion to dismiss the Amended Complaint. On February 9, 2018, VEON filed its Answer and Affirmative Defenses to the allegations that remain in the Amended Complaint after the Court’s September 19, 2017 Order. Motions to dismiss were filed by all the individual defendants on February 9, 2018. On April 13, 2018, plaintiff dismissed its claims voluntarily against one of the individual defendants. On August 30, 2018, the Court granted the motions to dismiss by all of the individual defendants remaining in the action, and the time for appeal has now expired. On May 17, 2019, VEON filed a motion for judgment on the pleadings, arguing that Westway lacked standing as a result of the September 19, 2017 order because it had not purchased any securities on or after the date of the earliest alleged misstatement. On May 21, 2019, the Rosen Law Firm submitted a letter to the Court on behalf of Boris Lvov seeking a pre-motion conference for leave to file a motion to intervene and substitute Lvov as lead plaintiff. On May 24, 2019, Westway filed a letter opposing Mr. Lvov’s request, and VEON filed a letter taking no position. Westway filed its opposition to VEON’s motion on June 17, 2019, and VEON filed its reply papers on June 28, 2019. The Court’s ruling on VEON’s motion for judgment on the pleadings is pending. The Company intends to vigorously defend the action at all phases of the proceedings. Canadian action brought by the Catalyst Capital Group Inc. VEON was a defendant in an action brought in 2016 by The Catalyst Capital Group Inc. (“Catalyst”) for CAD 1.3 billion (US$1,034) alleging breach of contract in the Superior Court of Justice in Ontario, Canada. On April 18, 2018, the Superior Court dismissed Catalyst’s claim as an abuse of process. On May 2, 2019, the Ontario Court of Appeal upheld the dismissal. On November 14, 2019, the Supreme Court of Canada denied Catalyst’s application for leave to appeal the dismissal. There is no further avenue of appeal and Catalyst’s claim is fully terminated. All defendants, including VEON, were awarded legal costs for each level of proceedings. VAT on Replacement SIMs SIM Cards Issued June 2009 to December 2011 On April 1, 2012, the National Board of Revenue (“NBR”) issued a demand to Banglalink Digital Communications Limited (“Banglalink”) for BDT 7.74 billion (US$94) for unpaid SIM tax (VAT and supplementary duty). The NBR alleged that Banglalink evaded SIM tax on new SIM cards by issuing them as replacements. On the basis of 5 random SIM card purchases made by the NBR, the NBR concluded that all SIM card replacements issued by Banglalink between June 2009 and December 2011 (7,021,834 in total) were new SIM connections and subject to tax. Similar notices were sent to three other operators in Bangladesh. Banglalink and the other operators filed separate petitions in the High Court, which stayed enforcement of the demands. In an attempt to assist the NBR in resolving the dispute, the Government ordered the NBR to form a Review Committee comprised of the NBR, the Commissioner of Taxes (“LTU”), Bangladesh Telecommunication Regulatory Commission (“BTRC”), AMTOB and the operators (including Banglalink). The Review Committee identified a methodology to determine the amount of unpaid SIM tax and, after analyzing 1,200 randomly selected SIM cards issued Banglalink, determined that only 4.83% were incorrectly registered as replacements. The Review Committee’s interim report was signed off by all the parties, however, the Convenor of the Review Committee reneged on the interim report and unilaterally published a final report that was not based on the interim report or the findings of the Review Committee. The operators objected to the final report. The NBR Chairman and operators’ representative agreed that the BTRC would prepare further guidelines for verification of SIM users. Although the BTRC submitted its guidelines (under which Bangalink’s exposure was determined to be 8.5% of the original demand), the Convenor of the Review Committee submitted a supplementary report which disregarded the BTRC’s guidelines and assessed Banglalink’s liability for SIM tax to be BDT 7.62 billion (US$92). The operators refused to sign the supplementary report. On May 18, 2015, Banglalink received an updated demand from the LTU claiming Banglalink had incorrectly issued 6,887,633 SIM cards as replacement SIM cards between June 2009 and December 2011 and required Banglalink to pay BDT 5.32 billion (US$64) in SIM tax. The demand also stated that interest may be payable. Similar demands were sent to the other operators. On June 25, 2015, Banglalink filed an application to the High Court to stay the updated demand, and a stay was granted. On August 13, 2015, Banglalink filed its appeal against the demand before the Appellate Tribunal and deposited 10% of the amount demanded in order to proceed. The other operators also appealed their demands. On May 26, 2016, Banglalink presented its legal arguments and on September 28, 2016, the appeals of all the operators were heard together. The Bangladesh Appellate Tribunal rejected the appeal of Banglalink and all other operators on June 22, 2017. On July 11, 2017, Banglalink filed an appeal of the Appellate Tribunal’s judgment with the High Court Division of the Supreme Court of Bangladesh. An appeal hearing is not yet scheduled. SIM Cards Issued July 2012 to June 2015 On November 20, 2017, the LTU issued a final demand to Banglalink for BDT 1.69 billion (US$20) for unpaid tax on SIM card replacements issued by Banglalink between July 2012 and June 2015. On February 20, 2018, Banglalink filed its appeal against this demand before the Appellate Tribunal and deposited 10% of the amount demanded in order to proceed. By its judgment dated February 10, 2020, the Appellate Tribunal rejected Banglalink’s appeal. Banglalink can appeal the decision to the High Court Division within 90 days of the judgment.The operators continue to engage in discussions with the government in an attempt to resolve the dispute. As of December 31, 2019, the Company has recorded a provision of US$11 (2018: US$11). Hearings took place on March 19, 2019 and April 23, 2019. Further appeal hearings are not yet scheduled. Dispute concerning sale of Telecel Globe Limited Global Telecom Holding S.A.E. (“GTH”) and Niel Natural Resources Investments S.A. ("Niel") entered into a Share Purchase Agreement on March 28, 2013, as amended from time to time (the “SPA”) in relation to the proposed purchase by Niel of GTH's majority stake in Telecel Globe Limited ("Telecel") and telecommunications operations in the Central African Republic and Burundi. The parties subsequently entered into three amendments to the original SPA between April and August 2013 due to Niel’s failure to timely close the intended transaction. Pursuant to the terms of the amendments, the parties extended the Longstop Date each time in exchange for payments of deposits by Niel. As Niel ultimately failed to close the intended transaction, the deposits paid to GTH were not refunded, which was in accordance with the terms of the SPA which is no longer in force. GTH completed the sale of Telecel in October 2014, to another purchaser for consideration less than had been agreed with Niel. During 2019, Niel commenced an arbitration at the London Court of International Arbitration (“LCIA”) in relation to the deposit monies retained by GTH and, in the Dutch courts, obtained an ex parte order attaching funds on GTH’s bank accounts in The Netherlands and other pre-award security. Niel consented to the partial lifting of this Dutch court order as to the bank accounts and certain other pre-award security on December 3, 2019. On July 5, 2019, the Tribunal granted GTH’s application for security for costs, pursuant to which Niel deposited GBP 250,000 in escrow with the LCIA. Niel filed its Statement of Claim on July 25, 2019; GTH filed its Statement of Defence and Cross-Claim on September 5, 2019; Niel filed its Statement of Reply and Defence to Cross-Claims on October 1, 2019; GTH filed its Statement of Reply to the Defence to Cross-Claims on October 14, 2019. A hearing is scheduled for September 2020. On February 27, 2020, Niel joined GTH as a party to its claim originally lodged against the FRA and Prime Minister of Egypt in the Egyptian administrative courts on September 5, 2019. Niel is contesting the FRA’s approval of the GTH delisting and sale of assets to VEON Holdings B.V. to avoid any interference with Niel’s ability to enforce a potential award against GTH. On November 16, 2019, the court referred the case to the State Commissioner (a preparatory unit within the administrative court). The next hearing date before the state commissioner is April 6, 2020. GTH plans to continue vigorously contesting Niel’s arbitration claims and otherwise defending against all proceedings and actions in relation to the dispute with Niel. Other contingencies and uncertainties In addition to the individual matters mentioned above, the Company is involved in other disputes, litigation and regulatory inquiries and investigations, both pending and threatened, in the ordinary course of its business. The Company’s dispute with the Pakistan Telecommunication Authority over its license renewal in Pakistan, explained in Note 15 below, is an example of such a matter. The total value of all other individual contingencies that are able to be quantified and are above US$5, other than disclosed above, amounts to US$69 (2018: US$68). The Company does not expect any liability arising from these contingencies to have a material effect on the results of operations, liquidity, capital resources or financial position of the Company. Furthermore, the Company believes it has provided for all probable liabilities arising in the ordinary course of its business. For the ongoing matters described above, where the Company has concluded that the potential loss arising from a negative outcome in the matter cannot be estimated, the Company has not recorded an accrual for the potential loss. However, in the event a loss is incurred, it may have an adverse effect on the results of operations, liquidity, capital resources, or financial position of the Company. ACCOUNTING POLICIES Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are discounted using a current pre-tax rate if the time value of money is significant. Contingent liabilities are possible obligations arising from past events, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. SOURCE OF ESTIMATION UNCERTAINTY The Group is involved in various legal proceedings, disputes and claims, including regulatory discussions related to the Group’s business, licenses, tax positions and investments, and the outcomes of these are subject to significant uncertainty. Management evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of loss. Unanticipated events or changes in these factors may require the Group to increase or decrease the amount recorded for a matter that has not been previously recorded because it was not considered probable. In the ordinary course of business, VEON may be party to various legal and tax proceedings, including as it relates to compliance with the rules of the telecom regulators in the countries in which VEON operates, competition law and anti-bribery and corruption laws, including the U.S. Foreign Corrupt Practices Act (“FCPA”). Non-compliance with such rules and laws may cause VEON to be subject to claims, some of which may relate to the developing markets and evolving fiscal and regulatory environments in which VEON operates. In the opinion of management, VEON’s liability, if any, in all pending litigation, other legal proceeding or other matters, other than what is discussed in this Note, will not have a material effect upon the financial condition, results of operations or liquidity of VEON. |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses consisted of the following items for the years ended December 31:
LEASES On January 1, 2019, the Company adopted IFRS 16 Leases. The Company applied a modified retrospective approach, which means that prior period comparatives were not restated. For further details please refer to Note 24. Lease expenses are no longer recorded in the income statement but are instead considered in recording a lease liability in the statement of financial position, except for short-term leases and leases for low value items which are immediately expensed as incurred. Total operating lease expense recognized in accordance with IAS 17 Leases in the consolidated income statement, primarily within "Network and IT costs", amounted to US$425 in 2018 and US$444 in 2017. ACCOUNTING POLICIES Customer associated costs Customer associated costs relate primarily to commissions paid to third-party dealers and marketing expenses. Certain dealer commissions are initially capitalized in the consolidated statement of financial position and subsequently amortized within "Customer associated costs", see Note 3 for further details. |
PROVISIONS AND CONTINGENT LIABILITIES - Provisions narrative (Details) - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended | ||
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Jun. 30, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
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Disclosure of other provisions [line items] | ||||
New provisions, other provisions | $ 180 | $ 63 | ||
Income tax expense | 498 | 369 | $ 472 | |
DPA, the guilty plea, DSA and SEC | ||||
Disclosure of other provisions [line items] | ||||
Legal fees paid utilizing provision | 6 | 7 | ||
Decrease in legal provision by change in estimate | 10 | |||
Legal provisions | 10 | 26 | ||
GTH | ||||
Disclosure of other provisions [line items] | ||||
Income tax expense | 136 | 124 | $ 375 | |
GTH | Egyptian Tax Authority | GTH Tax Settlement | ||||
Disclosure of other provisions [line items] | ||||
Litigation settlement awarded to other party | $ 136 | |||
Income tax expense | 29 | |||
Non-income tax provisions | ||||
Disclosure of other provisions [line items] | ||||
New provisions, other provisions | $ 79 | $ 11 | ||
Non-income tax provisions | GTH | Egyptian Tax Authority | GTH Tax Settlement | ||||
Disclosure of other provisions [line items] | ||||
New provisions, other provisions | $ 27 |
SIGNIFICANT TRANSACTIONS - Significant Transactions in 2019 (Details) ج.م. / shares in Units, ج.م. in Millions, $ in Millions |
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Aug. 31, 2019
USD ($)
shares
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Aug. 31, 2019
EGP (ج.م.)
shares
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Apr. 30, 2019
USD ($)
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Jun. 30, 2019
USD ($)
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Dec. 31, 2019
USD ($)
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Dec. 31, 2018
USD ($)
|
Dec. 31, 2017
USD ($)
|
Aug. 31, 2019
ج.م. / shares
|
|
Investments in subsidiaries | ||||||||
Changes in ownership interest in a subsidiary that do not result in a loss of control | $ (608) | $ (259) | ||||||
Other operating gains | 350 | $ 0 | 0 | |||||
Ericsson | ||||||||
Investments in subsidiaries | ||||||||
Other operating gains | $ 350 | |||||||
Other capital reserves | ||||||||
Investments in subsidiaries | ||||||||
Changes in ownership interest in a subsidiary that do not result in a loss of control | $ (2,594) | $ (12) | ||||||
Global Telecom Holding S.A.E | ||||||||
Investments in subsidiaries | ||||||||
Proportion of ownership interest in subsidiary | 99.54% | 57.70% | ||||||
Book values of material NCIs | $ 1,986 | $ 853 | $ (1,190) | |||||
Cost of acquisition of non-controlling interest | 608 | |||||||
Global Telecom Holding S.A.E | Other capital reserves | ||||||||
Investments in subsidiaries | ||||||||
Changes in ownership interest in a subsidiary that do not result in a loss of control | $ (2,594) | |||||||
Global Telecom Holding S.A.E | ||||||||
Investments in subsidiaries | ||||||||
Number of shares acquired (in shares) | shares | 1,914,322,110 | 1,914,322,110 | ||||||
Percentage of voting equity interests acquired | 40.55% | 41.00% | ||||||
Consideration paid (received) | $ 587 | ج.م. 9,725 | ||||||
Mandatory tender offer, price per share (in EGP per share) | ج.م. / shares | ج.م. 5.08 | |||||||
Kazakhstan | Kcell Joint Stock Company | ||||||||
Investments in subsidiaries | ||||||||
Settlement received due to termination of network sharing agreement | $ 38 |
IMPAIRMENT OF ASSETS - Key assumptions (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Key assumptions for determining the recoverable amount | |||
Maturity period for an United States Treasury bond | 20 years | ||
Percentage of equity market risk premium | 5.60% | 5.40% | 6.00% |
Median historical capital structure | 5 years | ||
Cash flow forecasts for license and spectrum payments | 5 years | ||
Russia | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 9.10% | 10.30% | 10.60% |
Average annual revenue growth rate during forecast period | 1.40% | 1.10% | 1.90% |
Terminal growth rate | 1.60% | 1.30% | 1.00% |
Average operating margin | 34.70% | 34.60% | 36.40% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 19.90% | 19.80% | 15.70% |
Ukraine | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 14.60% | 16.30% | 17.10% |
Average annual revenue growth rate during forecast period | 5.60% | 4.40% | 3.90% |
Terminal growth rate | 3.20% | 4.00% | 2.00% |
Average operating margin | 59.90% | 54.00% | 49.90% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 18.80% | 16.30% | 15.60% |
Algeria | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 10.40% | 11.10% | 10.70% |
Average annual revenue growth rate during forecast period | 1.00% | 0.70% | 1.00% |
Terminal growth rate | 1.00% | 0.90% | 3.00% |
Average operating margin | 42.60% | 44.00% | 46.20% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 12.50% | 15.10% | 14.80% |
Pakistan | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 14.50% | 14.40% | 15.00% |
Average annual revenue growth rate during forecast period | 3.90% | 3.50% | 5.00% |
Terminal growth rate | 2.70% | 4.00% | 4.00% |
Average operating margin | 47.30% | 47.90% | 43.60% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 17.20% | 16.70% | 15.30% |
Bangladesh | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 11.40% | 12.20% | 12.70% |
Average annual revenue growth rate during forecast period | 3.20% | 0.60% | 5.00% |
Terminal growth rate | 3.30% | 4.00% | 4.60% |
Average operating margin | 36.00% | 35.40% | 38.70% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 15.40% | 14.90% | 14.30% |
Kazakhstan | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 9.20% | 8.40% | 10.80% |
Average annual revenue growth rate during forecast period | 5.30% | 2.80% | 3.20% |
Terminal growth rate | 3.30% | 1.10% | 2.40% |
Average operating margin | 49.90% | 46.50% | 44.50% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 20.00% | 17.70% | 17.90% |
Kyrgyzstan | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 14.10% | 14.80% | 15.50% |
Average annual revenue growth rate during forecast period | 1.60% | 2.80% | (1.50%) |
Terminal growth rate | 5.00% | 5.00% | 3.50% |
Average operating margin | 31.40% | 39.90% | 42.00% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 26.90% | 17.20% | 16.40% |
Uzbekistan | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 14.50% | 13.10% | 15.30% |
Average annual revenue growth rate during forecast period | 4.10% | 5.50% | 6.90% |
Terminal growth rate | 6.00% | 6.30% | 6.50% |
Average operating margin | 51.40% | 43.90% | 42.90% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 19.40% | 16.20% | 14.10% |
Armenia | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 11.40% | 12.50% | 13.00% |
Average annual revenue growth rate during forecast period | (1.00%) | 0.20% | (1.00%) |
Terminal growth rate | 3.00% | 0.80% | 3.00% |
Average operating margin | 23.90% | 23.60% | 29.70% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 23.00% | 21.00% | 19.60% |
Georgia | |||
Key assumptions for determining the recoverable amount | |||
Discount rate (local currency) | 9.60% | 10.60% | 11.00% |
Average annual revenue growth rate during forecast period | 3.60% | 2.10% | 5.60% |
Terminal growth rate | 3.00% | 3.00% | 1.00% |
Average operating margin | 28.90% | 24.50% | 25.20% |
Average CAPEX excl licenses and ROU as a percentage of revenue | 22.00% | 23.80% | 23.30% |
INCOME TAXES - Income tax expense (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Current income taxes | |||
Current year | $ 495 | $ 477 | $ 397 |
Adjustments in respect of previous years | 5 | 9 | (28) |
Total current income taxes | 500 | 486 | 369 |
Deferred income taxes | |||
Movement of temporary differences and losses | (36) | (152) | (13) |
Changes in tax rates | (1) | 6 | 10 |
Changes in recognized deferred tax assets | 39 | 0 | 20 |
Adjustments in respect of previous years | 3 | 28 | 86 |
Other | (7) | 1 | 0 |
Total deferred tax expense | (2) | (117) | 103 |
Income tax expense | $ 498 | $ 369 | $ 472 |
CONDENSED SEPARATE FINANCIAL INFORMATION OF VEON - Condensed Statement of Financial Position (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|||
---|---|---|---|---|---|---|---|
Non-current assets | |||||||
Intangible assets | $ 5,688 | $ 5,670 | [1] | $ 6,786 | |||
Total non-current assets | 13,560 | $ 12,928 | 10,992 | [1] | |||
Total current assets | 2,499 | 3,110 | [1] | ||||
Total assets | 16,059 | 15,981 | 14,102 | [1] | |||
Equity | 1,226 | 3,667 | 3,670 | [1] | |||
Total equity and liabilities | 16,059 | $ 15,981 | 14,102 | [1] | |||
Veon Ltd. | |||||||
Non-current assets | |||||||
Intangible assets | 10 | 9 | 37 | ||||
Tangible fixed assets | 15 | 4 | 7 | ||||
Financial fixed assets | 1,152 | 3,590 | 4,236 | ||||
Total non-current assets | 1,177 | 3,603 | 4,280 | ||||
Total current assets | 393 | 435 | 394 | ||||
Total assets | 1,570 | 4,038 | 4,674 | ||||
Equity | 1,226 | 3,670 | 4,331 | ||||
Total liabilities | 344 | 368 | 343 | ||||
Total equity and liabilities | $ 1,570 | $ 4,038 | $ 4,674 | ||||
|
INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - liabilities | $ (40) | |
Opening balance - assets | $ 17 | |
Net income statement movement | (2) | 117 |
Other movements | (22) | (60) |
Ending balance - liabilities | (7) | |
Ending balance - assets | 17 | |
Property and equipment | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - liabilities | (275) | (443) |
Net income statement movement | 5 | 126 |
Other movements | (18) | 42 |
Ending balance - liabilities | (288) | (275) |
Intangible assets | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - liabilities | (60) | (165) |
Net income statement movement | 22 | 94 |
Other movements | 0 | 11 |
Ending balance - liabilities | (38) | (60) |
Trade receivables | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - assets | 32 | 36 |
Net income statement movement | 16 | (6) |
Other movements | (1) | 2 |
Ending balance - assets | 47 | 32 |
Provisions | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - assets | 30 | 33 |
Net income statement movement | 2 | 2 |
Other movements | (1) | (5) |
Ending balance - assets | 31 | 30 |
Accounts payable | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - assets | 113 | 133 |
Net income statement movement | 11 | 7 |
Other movements | 32 | (27) |
Ending balance - assets | 156 | 113 |
Withholding tax on undistributed earnings | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - liabilities | (50) | (116) |
Net income statement movement | (2) | 70 |
Other movements | 0 | (4) |
Ending balance - liabilities | (52) | (50) |
Tax losses and other balances carried forwards | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - assets | 2,173 | 2,434 |
Net income statement movement | (68) | (191) |
Other movements | (79) | (70) |
Ending balance - assets | 2,026 | 2,173 |
Non-recognized deferred tax assets | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - liabilities | (1,955) | (1,980) |
Other movements | 61 | 25 |
Ending balance - liabilities | (1,894) | (1,955) |
Other | ||
Reconciliation of changes in deferred tax liability (asset) [abstract] | ||
Opening balance - assets | 9 | 28 |
Net income statement movement | 12 | 15 |
Other movements | (16) | (34) |
Ending balance - assets | $ 5 | $ 9 |
BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|---|
Disclosure of voluntary change in accounting policy [line items] | ||||
Goodwill | $ 3,959 | $ 3,816 | $ 3,816 | $ 4,618 |
Current income tax payable | $ 36 | 32 | ||
Intangible assets | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Goodwill | 3,816 | |||
Current income tax payable | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Income tax provision | 164 | |||
Current income tax payable | 196 | |||
Trade and other payables | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Customer advances | 192 | |||
Investments and derivatives | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Investments and derivatives, Non-current | 58 | |||
Current income tax assets | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Current income tax assets | 112 | |||
Previously stated | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Goodwill | 3,816 | |||
Previously stated | Goodwill | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Goodwill | 3,816 | |||
Previously stated | Provisions | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Income tax provision | 164 | |||
Previously stated | Other liabilities | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Customer advances | 192 | |||
Current income tax payable | 196 | |||
Previously stated | Other assets | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Investments and derivatives, Non-current | 58 | |||
Previously stated | Other current assets | ||||
Disclosure of voluntary change in accounting policy [line items] | ||||
Current income tax assets | $ 112 |
PROPERTY AND EQUIPMENT - Movement in right-of-use assets (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2019
USD ($)
| |
Disclosure of quantitative information about right-of-use assets [line items] | |
Additions | $ 158 |
Disposals | (35) |
Depreciation charge for the year | (448) |
Impairment | 0 |
Transfers | 0 |
Modifications and reassessments | 141 |
Translation adjustment | 146 |
Right-of-use assets | 1,985 |
Cost | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Right-of-use assets | 2,472 |
Accumulated depreciation and impairment | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Right-of-use assets | (487) |
Telecommunications equipment | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Additions | 142 |
Disposals | (27) |
Depreciation charge for the year | (306) |
Impairment | 0 |
Transfers | 18 |
Modifications and reassessments | 94 |
Translation adjustment | 116 |
Right-of-use assets | 1,638 |
Telecommunications equipment | Cost | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Right-of-use assets | 1,980 |
Telecommunications equipment | Accumulated depreciation and impairment | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Right-of-use assets | (342) |
Land, buildings and constructions | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Additions | 16 |
Disposals | (6) |
Depreciation charge for the year | (140) |
Impairment | 0 |
Transfers | (18) |
Modifications and reassessments | 47 |
Translation adjustment | 30 |
Right-of-use assets | 344 |
Land, buildings and constructions | Cost | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Right-of-use assets | 487 |
Land, buildings and constructions | Accumulated depreciation and impairment | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Right-of-use assets | (143) |
Office and other equipment | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Additions | 0 |
Disposals | (2) |
Depreciation charge for the year | (2) |
Impairment | 0 |
Transfers | 0 |
Modifications and reassessments | 0 |
Translation adjustment | 0 |
Right-of-use assets | 3 |
Office and other equipment | Cost | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Right-of-use assets | 5 |
Office and other equipment | Accumulated depreciation and impairment | |
Disclosure of quantitative information about right-of-use assets [line items] | |
Right-of-use assets | $ (2) |
SEGMENT INFORMATION - Reportable Segments (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Disclosure of operating segments [line items] | |||
Total revenue | $ 8,863 | $ 9,086 | $ 9,474 |
Adjusted EBITDA | 4,215 | 3,273 | 3,587 |
Reportable segments | |||
Disclosure of operating segments [line items] | |||
Total revenue | 8,863 | 9,086 | 9,474 |
Adjusted EBITDA | 4,215 | 3,273 | 3,587 |
Capital expenditures excluding licenses | 1,741 | 1,415 | 1,460 |
Reportable segments | Russia | |||
Disclosure of operating segments [line items] | |||
Total revenue | 4,481 | 4,654 | 4,729 |
Adjusted EBITDA | 1,957 | 1,677 | 1,788 |
Capital expenditures excluding licenses | 976 | 742 | 667 |
Reportable segments | Pakistan | |||
Disclosure of operating segments [line items] | |||
Total revenue | 1,321 | 1,494 | 1,525 |
Adjusted EBITDA | 669 | 714 | 703 |
Capital expenditures excluding licenses | 213 | 199 | 240 |
Reportable segments | Ukraine | |||
Disclosure of operating segments [line items] | |||
Total revenue | 870 | 688 | 622 |
Adjusted EBITDA | 572 | 387 | 347 |
Capital expenditures excluding licenses | 156 | 115 | 98 |
Reportable segments | Kazakhstan | |||
Disclosure of operating segments [line items] | |||
Total revenue | 486 | 441 | 416 |
Adjusted EBITDA | 270 | 206 | 180 |
Capital expenditures excluding licenses | 108 | 66 | 75 |
Reportable segments | Uzbekistan | |||
Disclosure of operating segments [line items] | |||
Total revenue | 258 | 315 | 513 |
Adjusted EBITDA | 136 | 136 | 261 |
Capital expenditures excluding licenses | 53 | 39 | 63 |
Reportable segments | Algeria | |||
Disclosure of operating segments [line items] | |||
Total revenue | 775 | 813 | 915 |
Adjusted EBITDA | 354 | 363 | 426 |
Capital expenditures excluding licenses | 108 | 107 | 132 |
Reportable segments | Bangladesh | |||
Disclosure of operating segments [line items] | |||
Total revenue | 537 | 521 | 574 |
Adjusted EBITDA | 222 | 183 | 233 |
Capital expenditures excluding licenses | 82 | 93 | 101 |
Reportable segments | Other and eliminations | |||
Disclosure of operating segments [line items] | |||
Total revenue | 135 | 160 | 180 |
Adjusted EBITDA | 312 | (34) | (26) |
Capital expenditures excluding licenses | 38 | 43 | 53 |
Reportable segments | HQ | |||
Disclosure of operating segments [line items] | |||
Total revenue | 0 | 0 | 0 |
Adjusted EBITDA | (277) | (359) | (325) |
Capital expenditures excluding licenses | $ 7 | $ 11 | $ 31 |
FINANCIAL RISK MANAGEMENT - Interest rate risk (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2019 |
Dec. 31, 2018 |
|
INTEREST RATE RISK | ||
FINANCIAL RISK MANAGEMENT | ||
Percent of borrowings that are at a fixed rate of interest | 91.00% | 91.00% |
Interest rate appreciation risk | ||
FINANCIAL RISK MANAGEMENT | ||
Percentage of change in significant exposure used for sensitivity analysis | 100.00% | 100.00% |
Interest rate depreciation risk | ||
FINANCIAL RISK MANAGEMENT | ||
Percentage of change in significant exposure used for sensitivity analysis | 100.00% | 100.00% |
RELATED PARTIES (Tables) |
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Disclosure of transactions between related parties [abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of compensation paid to key management personnel | The following table sets forth the total compensation paid to our directors and senior managers, who are considered to be key management of the company:
* The number of directors and senior managers vary from year to year. Amounts disclosed in previous years for ‘Long-term employee benefits’ represented total nominal values of the grants covering multiple years. Total compensation paid to directors and senior management approximates the amount charged in the consolidated income statement for that year. |
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Schedule of compensation paid to key management board members | The following table sets forth the total remuneration expense and compensation paid to the key senior managers in 2019 and 2018 (gross amounts in whole euro and whole US$ equivalents):
(i) Base salary includes holiday and/or pension allowances pursuant to the terms of an individual’s employment agreement. (ii) Annual incentive expense includes amounts accrued under the short-term incentive in respect of performance during the current year, while annual incentive paid includes amounts paid under the short-term incentive in respect of performance during the previous year. (iii) Other includes certain allowances and support (for example, relocation support). (iv) Share-based payments expense relates to amounts accrued under the value growth cash-based multi-year incentive plans, see below for further details. (v) Trond Westlie stepped down from the role of Group CFO on September 30, 2019. Meanwhile, Murat Kirkgoz commenced duties as Deputy Group CFO on August 1, 2019. (vi) Kjell Johnsen stepped down from the role of Group COO on Noveember 1, 2019. Sergi Herrero and Kaan Terzioglu assumed their roles on September 2, 2019 and November 1, 2019, respectively. |
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Schedule of compensation paid to supervisory board members | The following table sets forth the total remuneration expense to the members of the Board of Directors members in 2019 and 2018 (gross amounts in whole euro and whole US dollar equivalents):
* Ursula Burns was appointed Group CEO and Chairman of the VEON Ltd. board of directors on December 12, 2018. Accordingly, her total compensation for 2019 and 2018 has been included in the section “Compensation of Key Senior Managers” above, except for payments received in respect of her role on Board Committees. |
INVESTMENTS, DEBT AND DERIVATIVES - Debt and derivatives (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Jan. 01, 2019 |
Dec. 31, 2018 |
|||
---|---|---|---|---|---|---|
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | $ 10,344 | $ 7,856 | ||||
Non-current | 7,759 | $ 6,522 | 6,567 | [1] | ||
Current | 2,585 | $ 1,283 | 1,289 | [1] | ||
At fair value through profit or loss | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 254 | 107 | ||||
At fair value through profit or loss | Derivatives not designated as hedges | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 52 | 65 | ||||
At fair value through profit or loss | Derivatives designated as net investment hedges | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 161 | 0 | ||||
At fair value through profit or loss | Contingent consideration | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 41 | 40 | ||||
At fair value through profit or loss | Other | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 0 | 2 | ||||
At amortized cost | Principal amount outstanding | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 7,519 | 7,298 | ||||
At amortized cost | Interest accrued | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 79 | 81 | ||||
At amortized cost | Discounts, unamortized fees, hedge basis adjustment | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | (10) | (13) | ||||
At amortized cost | Bank loans and bonds | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 7,588 | 7,366 | ||||
At amortized cost | Lease liabilities | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 2,083 | |||||
At amortized cost | Put-option liability over non-controlling interest | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 342 | 306 | ||||
At amortized cost | Other financial liabilities | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | 77 | 77 | ||||
At amortized cost | Financial liabilities at amortised cost, class | ||||||
Disclosure of fair value measurement of liabilities [line items] | ||||||
Carrying value | $ 10,090 | $ 7,749 | ||||
|
INVESTMENTS, DEBT AND DERIVATIVES - Fair value (Details) - USD ($) $ in Millions |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|
Bank loans and bonds | At amortized cost | ||
Disclosure of fair value measurement of liabilities [line items] | ||
Financial liabilities, at fair value | $ 7,887 | $ 7,430 |
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